LANCE INC (Form: 10-Q, Received: 04/30/2007 06:02:31)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter (13 weeks) ended March 31, 2007

Commission File Number 0-398

LANCE, INC.

(Exact name of registrant as specified in its charter)


North Carolina		56-0292920
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

8600 South Boulevard P.O. Box 32368 Charlotte, North Carolina		28232
(Address of principal executive offices)		(Zip Code)

704-554-1421
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The number of shares outstanding of the registrant’s $0.83-1/3 par value Common Stock, its only outstanding class of Common Stock as of April 25, 2007, was 30,992,983 shares.

LANCE, INC. AND SUBSIDIARIES

INDEX


	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Statements of Income/(Loss) (Unaudited) — Quarters Ended March 31, 2007 and April 1, 2006		3

Condensed Consolidated Balance Sheets — March 31, 2007 (Unaudited) and December 30, 2006		4

Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Unaudited) — Quarters Ended March 31, 2007 and April 1, 2006		5

Condensed Consolidated Statements of Cash Flows (Unaudited) — Quarters Ended March 31, 2007 and April 1, 2006		6

Notes to the Condensed Consolidated Financial Statements (Unaudited)		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		10

Item 3. Quantitative and Qualitative Disclosures about Market Risk		13

Item 4. Controls and Procedures		13

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		13

Item 1A. Risk Factors		13

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		14

Item 6. Exhibits		14

SIGNATURE		15

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income/(Loss) (Unaudited)
For the Quarters Ended March 31, 2007 and April 1, 2006
(In thousands, except share and per share data)


	Quarter Ended
	March 31,			April 1,
	2007			2006

Net sales and other operating revenue	$	182,426		$	180,745

Cost of sales and operating expenses/(income):
Cost of sales		102,976			104,866
Selling, marketing and delivery		56,479			65,045
General and administrative		13,137			11,458
Other (income)/expense, net		(90	)		162

Total costs and expenses		172,502			181,531


Income/(loss) from continuing operations before interest		9,924			(786	)

Interest expense, net		(604	)		(669	)

Income/(loss) from continuing operations before income taxes		9,320			(1,455	)
Income tax (expense)/benefit		(3,448	)		531

Net income/(loss) from continuing operations		5,872			(924	)

Income from discontinued operations		537			250
Income tax expense		(199	)		(91	)

Net income from discontinued operations		338			159


Net income/(loss)	$	6,210		$	(765	)


Basic earnings/(loss) per share:
From continuing operations	$	0.19		$	(0.03	)
From discontinued operations	$	0.01		$	—
Basic earnings/(loss) per share	$	0.20		$	(0.03	)
Weighted average shares outstanding — basic		30,805,000			29,933,000

Diluted earnings/(loss) per share:
From continuing operations	$	0.19		$	(0.03	)
From discontinued operations	$	0.01		$	—
Diluted earnings/(loss) per share	$	0.20		$	(0.03	)
Weighted average shares outstanding — diluted		31,131,000			30,362,000

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
As of March 31, 2007 (Unaudited) and December 30, 2006
(In thousands, except share data)


	March 31,		December 30,
	2007		2006
ASSETS
Current assets
Cash and cash equivalents	$	3,246	$	5,504
Accounts receivable, net		65,235		61,690
Inventories		37,329		36,838
Deferred income tax asset		8,748		8,811
Assets held for sale		5,259		6,552
Prepaid expenses and other current assets		7,641		6,298

Total current assets		127,458		125,693

Other assets
Property, plant & equipment, net		193,661		193,009
Goodwill		49,417		49,091
Other intangible assets, net		13,200		13,209
Other assets		4,663		4,450

Total assets	$	388,399	$	385,452


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	19,644	$	18,194
Accrued compensation		18,768		22,299
Accrued retirement plans		1,370		5,192
Accrual for casualty insurance claims		6,726		6,783
Accrual for medical insurance claims		4,117		3,488
Accrued selling costs		5,169		4,860
Other payables and accrued liabilities		14,278		12,632

Total current liabilities		70,072		73,448

Other liabilities
Long-term debt		50,000		50,000
Deferred income taxes		25,962		26,562
Accrual for casualty insurance claims		9,074		9,418
Other long-term liabilities		6,035		3,624

Total liabilities		161,143		163,052


Commitments and contingencies

Stockholders’ equity
Common stock, 30,980,285 and 30,855,891 shares outstanding, respectively		25,817		25,714
Preferred stock, no shares outstanding		—		—
Additional paid-in capital		34,998		32,129
Retained earnings		160,665		159,329
Accumulated other comprehensive income		5,776		5,228

Total stockholders’ equity		227,256		222,400

Total liabilities and stockholders’ equity	$	388,399	$	385,452

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income/(Loss) (Unaudited)
For the Quarters Ended March 31, 2007 and April 1, 2006
(In thousands, except share data)


								Unamortized						Accumulated
					Additional			Portion of						Other
			Common		Paid-in			Restricted Stock			Retained			Comprehensive
	Shares		Stock		Capital			Awards			Earnings			Income			Total

Balance, December 31, 2005		29,808,705	$	24,841	$	13,870		$	(2,490	)	$	160,407		$	5,081		$	201,709

Comprehensive income/(loss):
Net loss		—		—		—			—			(765	)		—			(765	)
Foreign currency translation adjustment		—		—		—			—			—			(163	)		(163	)

Total comprehensive loss																		(928	)


Cash dividends paid to stockholders		—		—		—			—			(4,789	)		—			(4,789	)

Stock options exercised, including excess tax benefit of $1,037		417,645		348		6,777			—			—			—			7,125

Stock-based compensation						(2,367	)		2,490									123

Cancellation, issuance and amortization of restricted stock, net		19,425		16		195			—			—			—			211

Balance, April 1, 2006		30,245,775	$	25,205	$	18,475		$	—		$	154,853		$	4,918		$	203,451


Balance, December 30, 2006		30,855,891	$	25,714	$	32,129		$	—		$	159,329		$	5,228		$	222,400

Comprehensive income:
Net income		—		—		—			—			6,210			—			6,210
Foreign currency translation adjustment		—		—		—			—			—			640			640
Net unrealized losses on derivative instruments, net of tax effect of $24		—		—		—			—			—			(34	)		(34	)
Amortization of gains from post- retirement medical plan, net of tax effect of $17															(58	)		(58	)

Total comprehensive income																		6,758


Cash dividends paid to stockholders		—		—		—			—			(4,935	)		—			(4,935	)

Stock options exercised, including excess tax benefit of $110		50,394		42		787			—			—			—			829

Cumulative adjustment from adoption of FIN 48		—		—		—			—			61			—			61

Stock-based compensation previously recognized under a liability plan		—		—		316			—			—			—			316

Stock-based compensation		—		—		401			—			—			—			401

Cancellation, issuance and amortization of restricted stock, net		74,000		61		1,365			—			—			—			1,426

Balance, March 31, 2007		30,980,285	$	25,817	$	34,998		$	—		$	160,665		$	5,776		$	227,256

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Quarters Ended March 31, 2007 and April 1, 2006
(In thousands)


	Quarters Ended
		March 31,			April 1,
	2007			2006
Operating activities
Net income/(loss)	$	6,210		$	(765	)
Adjustments to reconcile net income/(loss) to cash provided by operating activities:
Depreciation and amortization		6,981			6,650
Stock-based compensation expense		876			660
(Gain)/loss on sale of property, net		(140	)		110
Changes in operating assets and liabilities		(5,916	)		(10,724	)

Net cash from/(used in) operating activities		8,011			(4,069	)


Investing activities
Purchases of property and equipment		(7,073	)		(9,855	)
Proceeds from sale of property		802			1,383

Net cash used in investing activities		(6,271	)		(8,472	)


Financing activities
Dividends paid		(4,935	)		(4,789	)
Issuance of common stock		829			7,125
Net proceeds from revolving credit facilities		—			9,506

Net cash flow (used in)/from financing activities		(4,106	)		11,842


Effect of exchange rate changes on cash		108			83


Decrease in cash and cash equivalents		(2,258	)		(616	)
Cash and cash equivalents at beginning of period		5,504			3,543

Cash and cash equivalents at end of period	$	3,246		$	2,927


Supplemental information:
Cash paid for income taxes, net of refunds of $0 and $2, respectively	$	32		$	383
Cash paid for interest	$	718		$	827

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

LANCE, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The accompanying unaudited condensed consolidated financial statements of Lance, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These condensed financial statements should be read in conjunction with the audited financial statements and notes included in our Form 10-K for the year ended December 30, 2006 filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2007. In our opinion, these condensed consolidated financial statements reflect all adjustments (consisting of only normal, recurring accruals) necessary to present fairly our condensed consolidated financial position as of March 31, 2007 and December 30, 2006 and the condensed consolidated statements of income/(loss) for the quarters ended March 31, 2007 and April 1, 2006 and the condensed consolidated statements of stockholders’ equity and comprehensive income/(loss) and cash flows for quarters ended March 31, 2007 and April 1, 2006. Prior year amounts shown in the accompanying condensed consolidated financial statements have been reclassified for consistent presentation.

The consolidated results of operations for the quarter ended March 31, 2007 are not necessarily indicative of the results to be expected for the year ending December 29, 2007.

Preparing financial statements requires management to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Examples include customer returns and promotions, provisions for bad debts, inventory valuations, useful lives of fixed assets, hedge transactions, supplemental retirement benefits, intangible asset valuations, incentive compensation, income taxes, insurance, post-retirement benefits, contingencies and legal proceedings. Actual results may differ from these estimates under different assumptions or conditions.

The principal raw materials used in the manufacture of our snack food products are flour, vegetable oil, sugar, potatoes, peanuts, nuts, cheese, and seasonings. The principal supplies used are flexible film, cartons, trays, boxes, and bags. These raw materials and supplies are generally available in adequate quantities in the open market either from sources in the United States or from other countries. These raw materials are generally contracted up to a year in advance.

5.		We utilize the dollar value last-in, first-out (“LIFO”) method of determining the cost of approximately 41% of our inventories. Because inventory valuations under the LIFO method are based on annual determinations, the interim LIFO valuations require management to estimate year-end costs and levels of inventories. The variation between estimated year-end costs and levels of LIFO inventories compared to the actual year-end amounts may materially affect the results of operations for the full year.

		Inventories consist of:


	March 31,			December 30,
(in thousands)	2007			2006

Finished goods	$	19,136		$	18,630
Raw materials		7,899			7,968
Supplies, etc.		14,288			14,077

Total inventories at FIFO cost		41,323			40,675
Less adjustments to reduce FIFO cost to LIFO cost		(3,994	)		(3,837	)

Total inventories	$	37,329		$	36,838

LANCE, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The following tables provide a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:


	Quarters Ended
	March 31,		April 1,
(in thousands)	2007		2006
Weighted average number of common shares used for basic earnings per share		30,805		29,933
Effect of potential dilutive shares		326		429

Weighted average number of common shares and potential dilutive shares used for diluted earnings per share		31,131		30,362

Anti-dilutive shares excluded from the above reconciliation		108		203

Sales to our largest customer, Wal-Mart Stores, Inc., were 20% and 18% of revenue for the quarters ended March 31, 2007 and April 1, 2006, respectively. Accounts receivable at March 31, 2007 and December 30, 2006 included receivables from Wal-Mart Stores, Inc. totaling $15.2 million and $13.6 million, respectively.

For the quarter ended March 31, 2007 and April 1, 2006, net bad debt benefit was $0.1 million and $0.2 million, respectively. Net bad debt benefit is included in selling, marketing and delivery in the accompanying condensed consolidated statements of income/(loss).

During the quarter ended March 31, 2007, we granted 114,000 vested nonqualified stock options that were previously accounted for as a liability. This resulted in an increase in additional paid-in capital and a decrease in accrued compensation of $0.3 million on the March 31, 2007 condensed consolidated balance sheet.

10.

Net periodic benefit income for our post-retirement medical benefit plan consists of the following:


	Quarters Ended
	March 31,			April 1,
(in thousands)	2007			2006
Components of net periodic postretirement benefit cost (income):
Service cost	$	—		$	1
Interest cost		4			12
Gain amortization		(75	)		(181	)

Net periodic postretirement benefit income	$	(71	)	$	(168	)

		For the quarter ended March 31, 2007, we paid less than $0.1 million in retiree benefit claims and received $0.1 million in plan participant contributions. For the quarter ended April 1, 2006, we paid $0.2 million in retiree benefit claims and received $0.1 million in plan participant contributions.

11.		At March 31, 2007 and December 30, 2006, we had $5.3 million and $6.6 million, respectively, of assets held for sale. The assets at March 31, 2007 are primarily related to the discontinued vending operations and two locations acquired from Tom’s Foods Inc. and subsequently closed. These assets are expected to be sold during 2007.

12.		In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 was adopted at the beginning of 2007. The $0.1 million cumulative effect of applying FIN 48 was reported as an increase to the opening balance of retained earnings. Additionally, we reclassified a $1.9 million net liability for uncertain tax positions from other payables and accrued liabilities to other long-term liabilities of $2.2 million and $0.3 million of deferred tax assets on the condensed consolidated balance sheet as of March 31, 2007.

LANCE, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

		We have recorded gross unrecognized tax benefits totaling $2.2 million as of March 31, 2007. Of this amount, $1.9 million would impact the effective tax rate if subsequently recognized. Various taxing authorities’ statutes of limitations related to the computation of our unrecognized tax benefits will expire within twelve months of the adoption of FIN 48 resulting in a potential $0.5 million reduction of the unrecognized tax benefit amount. We classify interest and penalties associated with income tax positions within income tax expense. The interest and penalty component of the unrecognized tax benefits as of March 31, 2007 was $0.4 million.

		We have open years for income tax audit purposes in our major taxing jurisdictions according to statutes as follows:


Jurisdiction		Open years
US federal Canada federal Ontario provincial Massachusetts North Carolina Iowa		2003 and forward 2002 and forward 2001 and forward 2001 and forward 2003 and forward 2003 and forward

The FASB also issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” in September 2006. SFAS No. 158 requires employers to recognize the overfunded or underfunded status of a single-employer defined benefit post-retirement plan as an asset or liability in its balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet, with limited exceptions. We adopted SFAS No. 158 at the end of 2006, which resulted in a reclassification of the unrealized gain component of the accrued post-retirement healthcare costs liability to accumulated other comprehensive income, net of tax, at December 30, 2006. There will be no impact from the adoption of the remaining provisions of SFAS No. 158 since we already measure the funded status of our post-retirement medical plan at the year-end balance sheet date.

LANCE, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of our financial condition and results of operations are based upon the condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Future events and their effects cannot be determined with absolute certainty. Therefore, management’s determination of estimates and judgments about the carrying values of assets and liabilities requires the exercise of judgment in the selection and application of assumptions based on various factors, including historical experience, current and expected economic conditions and other factors believed to be reasonable under the circumstances. We routinely evaluate our estimates, including those related to customer returns and promotions, provisions for bad debts, inventory valuations, useful lives of fixed assets, hedge transactions, supplemental retirement benefits, intangible asset valuations, incentive compensation, income taxes, insurance, post-retirement benefits, contingencies and legal proceedings. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations

Quarter Ended March 31, 2007 Compared to Quarter Ended April 1, 2006


											Favorable/
	Quarter Ended										(Unfavorable)
($ In thousands)	March 31, 2007					April 1, 2006					Variance

Revenue	$	182,426		100.0	%	$	180,745		100.0	%	$	1,681		0.9	%
Cost of sales		102,976		56.4	%		104,866		58.0	%		1,890		1.8	%

Gross margin		79,450		43.6	%		75,879		42.0	%		3,571		4.7	%
Selling, marketing and delivery		56,479		31.0	%		65,045		36.0	%		8,566		13.2	%
General and administrative		13,137		7.2	%		11,458		6.3	%		(1,679	)	(14.7	%)
Other (income)/expense, net		(90	)	—			162		0.1	%		252		155.6	%

Earnings/(losses) before interest and taxes		9,924		5.4	%		(786	)	(0.4	%)		10,710		1362.6	%
Interest expense, net		(604	)	(0.3	%)		(669	)	(0.4	%)		65		9.7	%
Income tax (expense)/benefit		(3,448	)	(1.9	%)		531		0.3	%		(3,979	)	(749.3	%)

Income/(loss) from continuing operations		5,872		3.2	%		(924	)	(0.5	%)		6,796		735.5	%
Income from discontinued operations		537		0.3	%		250		0.1	%		287		114.8	%
Income tax expense		(199	)	(0.1	%)		(91	)	—			(108	)	(118.7	%)

Net income from discontinued operations		338		0.2	%		159		0.1	%		179		112.6	%

Net income/(loss)	$	6,210		3.4	%	$	(765	)	(0.4	%)	$	6,975		911.8	%

For the quarter ended March 31, 2007, income from continuing operations increased $6.8 million and revenue increased $1.7 million or 0.9% compared to the quarter ended April 1, 2006. The results of operations for the prior year were significantly impacted by the acquisition of substantially all of the assets of Tom’s Foods Inc. (“Tom’s”), which occurred during the fourth quarter of 2005. For the first quarter of 2006, this acquisition resulted in carrying incremental overhead costs as well as additional expenses for retention incentives and other integration costs of $1.7 million. Excluding the $1.7 million of additional expense, income from continuing operations for the first quarter of 2007 increased $5.7 million compared to the same period last year.

Branded product revenue decreased $1.5 million or 1% compared to prior year primarily due to the discontinuation of certain product offerings and the consolidation of direct-store delivery routes during the first half of 2006 related to the integration of the Tom’s acquisition. Lance ^® sandwich crackers and Cape Cod Potato Chips ^® products reflected continued mid single-digit revenue growth, offset by declines in cakes, food service products and the elimination of various unprofitable product lines. Revenue from grocery stores and mass merchandisers increased approximately 15% but were more than offset by declines in “up and down the street,” dollar store, food service and convenience store customers.

Non-branded product revenue increased $3.2 million or 5% as a result of increased revenue from private label customers offset slightly by declines in contract manufacturing revenue. The increase in private label revenue was driven by growth with existing customers .

LANCE, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the quarter ended March 31, 2007, branded product revenue represented approximately 63% of total revenue compared to 64% for the quarter ended April 1, 2006. Private label revenue represented 27% and 25% of total revenue for the first quarters of 2007 and 2006, respectively, and contract manufacturing revenue represented 10% of total revenue for the first quarter of 2007 and 11% for the first quarter of 2006.

Gross margin increased $3.6 million or 1.6% as a percentage of revenue compared to the first quarter of 2006. Improved operating efficiencies and favorable pricing and promotions more than offset increased commodity costs of approximately $3.2 million.

Selling, marketing and delivery expenses decreased $8.6 million or 13% as compared to the first quarter of 2006. The decrease was primarily driven by supply chain and distribution efficiencies of $2.8 million, lower payroll-related costs of $1.7 million due to fewer employees, retention expenses of $1.5 million recognized in 2006 related to the Tom’s integration and a shift in timing of $1.1 million of advertising costs to later in 2007.

General and administrative expenses increased $1.7 million or 15% due to higher professional fees, increased incentive compensation and additional relocation costs as compared to the prior year.

Other income increased $0.3 million due to gains on property dispositions in the current year as opposed to losses in the prior year.

Net income from discontinued operations during the first quarter of 2007 increased $0.2 million due to the requirement to suspend depreciation on the vending assets held for sale.

Liquidity and Capital Resources

Liquidity
For the quarter ended March 31, 2007, the principal sources of liquidity for operating needs were provided by operating activities and cash on hand. Cash flow from operating activities, cash on hand and existing borrowing facilities are believed to be sufficient for the foreseeable future to enable us to meet our obligations, fund capital expenditures and pay cash dividends. As of March 31, 2007, cash and cash equivalents totaled $3.2 million.

Cash Flow
Net cash flow from operating activities was $8.0 million and cash flow used in operating activities was $4.1 million for the quarters ended March 31, 2007 and April 1, 2006, respectively. Working capital other than cash and cash equivalents increased to $54.1 million from $46.7 million at December 30, 2006.

Net cash flow used in investing activities was $6.3 million for the quarter ended March 31, 2007. Cash expenditures for fixed assets, principally tractors and trailers, manufacturing equipment, handheld computers and delivery vans for field sales representatives totaled $7.1 million, partially funded by proceeds from the sale of assets of $0.8 million.

Cash used in financing activities for the quarter ended March 31, 2007 totaled $4.1 million. Cash from financing activities for the quarter ended April 1, 2006 totaled $11.8 million. During the quarters ended March 31, 2007 and April 1, 2006, we paid dividends of $0.16 per share totaling $4.9 million and $4.8 million, respectively. In addition, we received cash and related tax benefits of $0.8 million and $7.1 million during the quarters ended March 31, 2007 and April 1, 2006, respectively, as a result of the exercise of stock options by employees. Net proceeds from our revolving credit facility totaled $9.5 million during the quarter ended April 1, 2006.

Dividends
On April 26, 2007, the Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on May 18, 2007 to stockholders of record on May 10, 2007.

LANCE, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Investing Activities
Capital expenditures are expected to continue at a level sufficient to support our strategic and operating needs. Capital expenditures and other investing activities for 2007 are projected to be approximately $48 million and funded by net cash flow from operating activities, cash on hand, and borrowing facilities. Capital expenditures for purchases of property and equipment were $47 million for the year ended December 30, 2006.

Additional borrowings available under all existing credit facilities totaled $94.5 million as of March 31, 2007. We have complied with all financial covenants contained in the credit facilities. We also maintain standby letters of credit in connection with our self-insurance reserves for casualty claims. The total amount of these letters of credit was $18.5 million as of March 31, 2007.

Commitments and Contingencies
The future minimum lease commitments for operating leases of facilities and equipment as of March 31, 2007 were $4.6 million.

We have entered into agreements with suppliers for the purchase of certain commodities and packaging materials used in the production process. These agreements arise in the normal course of business and consist of agreements to purchase specific quantities over a period of time. As of March 31, 2007, outstanding purchase commitments totaled approximately $44.7 million. These commitments range in length from a few weeks to 12 months.

Market Risks

The principal market risks that may adversely impact results of operations and financial position are changes in raw material prices, energy and fuel costs, interest and foreign exchange rates and credit risks. We selectively use derivative financial instruments to manage these risks. There are no market risk sensitive instruments held for trading purposes.

At times, we may enter into commodity futures and option contracts to manage fluctuations in prices of anticipated purchases of commodities. Our policy is to use these commodity derivative financial instruments only to the extent necessary to manage these exposures. We do not use these financial instruments for trading purposes. As of March 31, 2007, there were no outstanding commodity futures or option contracts.

Our debt obligations incur interest at floating rates, based on changes in the Eurodollar rate, Canadian Bankers’ Acceptance discount rate, Canadian prime rate and U.S. base rate interest. To manage exposure to changing interest rates, we selectively enter into interest rate swap agreements to maintain a desirable proportion of fixed to variable rate debt. In November 2006, we entered into an interest rate swap agreement in order to manage the risk associated with variable interest rates. The variable-to-fixed interest rate swap was accounted for as a cash flow hedge, with the effectiveness assessment based on changes in the present value of interest payments on the underlying debt. The notional amount, interest payment and maturity date of the swap matched the principal, interest payment and maturity dates of the related debt. The interest rate on the swap was 5.4%, including applicable margin. The underlying notional amount of the swap agreement was $35.0 million. The fair value of the interest rate swap liability as determined by a third-party financial institution was $0.2 million on March 31, 2007.

We are exposed to credit risks related to our accounts receivable. We perform ongoing credit evaluations of our customers to minimize the potential exposure. As of March 31, 2007 and December 30, 2006, we had allowances for doubtful accounts of $0.7 million and $1.0 million, respectively.

Through the operations of our Canadian subsidiary, there is an exposure to foreign exchange rate fluctuations, primarily between U.S. dollars and Canadian dollars. A majority of the revenue of our Canadian operations is denominated in U.S. dollars and a substantial portion of the operations’ costs, such as raw materials and direct labor, are denominated in Canadian dollars. We have entered into a series of forward contracts to mitigate a portion of this foreign exchange rate exposure. These contracts have maturities through December 2007. As of March 31, 2007, the fair value of the liability related to the forward contracts as determined by a third party financial institution was $0.2 million. The impact of foreign exchange on the results of operations was less than $0.1 million favorable as compared to the same quarter last year.

Due to foreign currency fluctuations during the quarters ended March 31, 2007 and April 1, 2006, we recorded gains/(losses) of $0.6 million and $(0.2) million, respectively, in other comprehensive income as a result of the translation of the subsidiary’s financial statements into U.S. dollars.

LANCE, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Risk Factors

We, from time to time, make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our estimates, expectations, beliefs, intentions, or strategies for the future, and the assumptions underlying such statements. We use the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify our forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Factors that could cause these differences include, but are not limited to, those set forth under Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 30, 2006.

Caution should be taken not to place undue reliance on our forward-looking statements, which reflect our management’s expectations only as of the time such statements are made. We undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The principal market risks to which we are exposed that may adversely impact results of operations and financial position include changes in raw material prices, energy and fuel costs, interest and foreign exchange rates and credit risks. Quantitative and qualitative disclosures about these market risks are included under “Market Risks” in Item 2 above, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective for the purpose of providing reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in our internal controls over financial reporting during the quarter ended March 31, 2007 that have materially affected, or that are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Lance, Inc. was one of nine companies sued in August 2005 in the Superior Court for the State of California for the County of Los Angeles by the Attorney General of the State of California for alleged violations of California Proposition 65. California Proposition 65 is a state law that, in part, requires companies to warn California residents if a product contains chemicals listed within the statute. The plaintiff seeks injunctive relief and penalties but has made no specific demands. We intend to vigorously defend this suit. In addition, we are subject to routine litigation and claims incidental to our business. In the opinion of management, such routine litigation and claims should not have a material adverse effect upon our consolidated financial statements taken as a whole.

Item 1A. Risk Factors

There have been no material changes to the factors disclosed in Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 30, 2006.

LANCE, INC. AND SUBSIDIARIES

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Our Credit Agreement dated October 20, 2006, restricts our payment of cash dividends and repurchases of common stock if, after payment of any dividends or any repurchases of common stock, our consolidated stockholders’ equity would be less than $125.0 million. At March 31, 2007, our consolidated stockholders’ equity was $227.3 million.

Item 6. Exhibits

Exhibit Index


No.		Description

3.1		Restated Articles of Incorporation of Lance, Inc. as amended through April 17, 1998, incorporated herein by reference to Exhibit 3 to the Registrant’s Quarterly Report on Form 10-Q for the twelve weeks ended June 13, 1998 (File No. 0-398).

3.2		Articles of Amendment of Lance, Inc. dated July, 14 1998 designating rights, preferences and privileges of the Registrant’s Series A Junior Participating Preferred Stock, incorporated herein by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 26, 1998 (File No. 0-398).

3.3		Bylaws of Lance, Inc., as amended through April 25, 2002, incorporated herein by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the thirteen weeks ended June 29, 2002 (File No. 0-398).

10.1*		Lance, Inc. 1997 Incentive Equity Plan, as amended, filed herewith.

10.2*		Lance, Inc. 2003 Key Employee Stock Plan, as amended, filed herewith.

10.3*		Lance, Inc. 2007 Three-Year Performance Incentive Plan for Officers, filed herewith.

10.4*		Lance, Inc. 2007 Annual Performance Incentive Plan for Officers, filed herewith.

10.5*		Lance, Inc. 2007 Stock Option Plan for Officers and Key Managers, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 14, 2007 (File No. 0-398).

10.6*		Agreement, effective as of February 14, 2007, between the Registrant and L. Rudy Gragnani, Jr., filed herewith.

10.7*		Offer Letter, effective as of January 8, 2007, between the Registrant and Glenn A. Patcha, filed herewith.

10.8*		Form of Executive Severance Agreement between the Registrant and each of Frank I. Lewis, Glenn A. Patcha, Rick D. Puckett, Blake W. Thompson and Margaret E. Wicklund, incorporated herein by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 27, 1997 (File No. 0-398).

10.9*		Retirement Agreement, effective March 26, 2007, between the Registrant and H. Dean Fields, filed herewith.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.

32		Certification pursuant to Rule 13a-14(b), as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

* Management contract.

Items 3, 4 and 5 are not applicable and have been omitted.

LANCE, INC. AND SUBSIDIARIES

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned thereunto duly authorized.


	LANCE, INC.

	By:	/s/ Rick D. Puckett

		Rick D. Puckett Executive Vice President, Chief Financial Officer, Treasurer and Secretary
Dated: April 27, 2007

Exhibit 10.1

LANCE, INC.

1997 INCENTIVE EQUITY PLAN
(As amended through February 9, 2007)

TABLE OF CONTENTS


Section 1.	Purpose	1

Section 2.	Definitions	1

Section 3.	Administration	3

Section 4.	Duration of and Common Stock Subject to Plan	4

Section 5.	Eligibility	4

Section 6.	Stock Options	4

Section 7.	Stock Appreciation Rights	5

Section 8.	Restricted Awards	6

Section 9.	Performance Awards	8

Section 10.	Other Stock-Based and Combination Awards	9

Section 11.	Deferral Elections	9

Section 12.	Termination of Employment	10

Section 13.	Non-transferability of Awards	10

Section 14.	Adjustments Upon Changes in Capitalization, Etc.	10

Section 15.	Change in Control	11

Section 16.	Amendment and Termination	12

Section 17.	Miscellaneous	12

LANCE, INC.

1997 INCENTIVE EQUITY PLAN

Section 1. Purpose. The purpose of the Lance, Inc. 1997 Incentive Equity Plan (the “Plan”) is to attract and retain managerial and other key employees, and to reward such employees for making major contributions to the success of Lance, Inc. (the “Company”). The Plan is designed to meet these objectives by offering performance-based stock and cash incentives and other equity-based incentive awards, thereby providing such employees a proprietary interest in the long term growth and performance of the Company.

Section 2. Definitions. For purposes of the Plan, unless the context clearly indicates otherwise, the following terms shall have the meanings set forth below:

( a ) “Award” (collectively, “Awards”) means an award or grant made to a Participant under Sections 6 through 10, inclusive, of the Plan.

( b ) “Board” means the Board of Directors of the Company.

( c ) “Code” means the Internal Revenue Code of 1986, as in effect from time to time, or any successor thereto, together with rules, regulations and interpretations promulgated thereunder.

( d ) “Common Stock” means the $.83 1/3 par value Common Stock of the Company or any security of the Company issued in substitution, exchange or lieu thereof pursuant to Section 14 hereof.

( e ) “Company” means Lance, Inc., a North Carolina corporation, and any subsidiary corporations within the meaning of Section 424(f) of the Code, as well as any successor corporation or corporations thereto.

( f ) “Compensation Committee” means the committee of the Board constituted as provided in Section 3 of the Plan.

( g ) “Disability” means the inability, by reason of physical or mental infirmity or both, of an individual to perform satisfactorily the duties then assigned to such individual or any other duties the Company is willing to assign to such individual for which compensation is payable. Disability shall be determined by the Compensation Committee based upon such evidence as the Compensation Committee shall deem sufficient and, upon medical evidence, if available, and, in the discretion of the Compensation Committee, upon certification of such Disability by an independent qualified physician.

( h ) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time, or any successor statute.

( i ) “Fair Market Value,” with respect to a share of the Common Stock at a particular time, shall be that value as determined by the Compensation Committee which shall be (i) if such Common Stock is listed on a national securities exchange or traded on the NASDAQ Stock Market, the closing price for sales of the Common Stock on a national securities exchange or the NASDAQ Stock Market on which the Common Stock is principally traded on said date, or, if no sales occur on said date, then on the next preceding date on which there were such sales of Common Stock, (ii) if the Common Stock shall not be listed on a national securities exchange or traded on the National Market System, the mean between the closing bid and asked prices last reported by the National Association of Securities Dealers, Inc. for the over-the-counter market on said date or, if no bid and asked prices are reported on said date, then on the next preceding date on which there were such quotations, or (iii) if at any time quotations for the Common Stock shall not be reported by the National Association of Securities Dealers, Inc. for the over-the-counter market and the Common Stock shall not be listed on any national securities exchange or traded on the NASDAQ Stock Market, the fair market value determined by the Compensation Committee in such manner as it may deem reasonable.

( j ) “Incentive Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is intended to be and is specifically designated as an “incentive stock option” within the meaning of Section 422 of the Code.

( k ) “Non-Qualified Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is not an Incentive Stock Option.

( l ) “Participant” means an employee of the Company who is granted an Award under the Plan.

( m ) “Performance Award” means an Award granted pursuant to the provisions of Section 9 of the Plan the vesting of which is contingent on performance attainment.

( n ) “Performance Equity Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 9 of the Plan.

( o ) “Performance Unit Grant” means an Award of monetary units granted pursuant to the provisions of Section 9 of the Plan.

( p ) “Plan” means the Lance, Inc. 1997 Incentive Equity Plan as set forth herein, as the same may be hereafter amended and from time to time in effect.

( q ) “Restricted Award” means an Award granted pursuant to the provisions of Section 8 of the Plan.

( r ) “Restricted Stock Grant” means an Award of shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan.

( s ) “Restricted Unit Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan.

( t ) “Retirement” means the termination of an employee’s employment with the Company at any time after the last day of the calendar month immediately preceding the calendar month in which the employee attains the age of 60 years.

( u ) “Stock Appreciation Right” means an Award to benefit from the appreciation of Common Stock granted pursuant to the provisions of Section 7 of the Plan.

( v ) “Stock Option” means an Award to purchase shares of Common Stock granted pursuant to the provisions of Section 6 of the Plan.

(w) “First Effective Amendment Date” means that date on which the stockholders of the Company approve the amendment to the Plan to increase the number of shares of Common Stock reserved for grants of Awards under the Plan by an additional 1,500,000 shares of Common Stock.

Section 3. Administration.

(a) The Plan shall be administered by those members of the Compensation Committee of the Board who are “nonemployee directors” for purposes of Rule 16b-3 under the Exchange Act.

(b) The Compensation Committee is authorized to grant Awards under the Plan, to construe and interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the implementation of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Any determination, decision or action of the Compensation Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive and binding upon all persons participating in the Plan and any person validly claiming under or through persons participating in the Plan. The Company shall effect the granting of Awards under the Plan in accordance with the determinations made by the

Compensation Committee, by execution of instruments in writing in such form as are approved by the Compensation Committee.

Section 4. Duration of and Common Stock Subject to Plan.

( a ) Term . The Plan shall be effective on April 18, 1997, subject to approval by a plurality of the shares voting on approval of the Plan at the Annual Meeting of Stockholders held on said date or any adjournment thereof. The Plan shall terminate on March 31, 2007.

( b ) Shares of Common Stock Subject to Plan . The maximum number of shares of Common Stock with respect to which Awards may be granted under the Plan, subject to adjustment as provided in Section 14 of the Plan, shall be 1,500,000 shares of the total authorized shares of the Common Stock. Beginning on the First Effective Amendment Date, there is hereby reserved for grants of Awards under the Plan, subject to adjustment as provided in Section 14 of the Plan, an additional 1,500,000 shares of Common Stock. For the purpose of computing the total number of shares of Common Stock available for Awards under the Plan, there shall be counted against the foregoing limitation the number of shares of Common Stock subject to issuance upon exercise or settlement of Awards and the number of shares of Common Stock which equal the value of Restricted Unit Grants and Performance Equity Grants and other stock-based Awards in each case determined as of the dates on which such Awards are granted. If any Awards are forfeited, terminated, settled in cash in lieu of stock, exchanged for other Awards, or expire unexercised, the shares of Common Stock which were theretofore subject to such Awards shall again be available for Awards under the Plan to the extent of such forfeiture, termination, settlement, exchange or expiration. Further, any shares of Common Stock which are used as full or partial payment to the Company by a Participant of the purchase price of shares of Common Stock upon exercise of Stock Options shall again be available for Awards under the Plan, as shall any shares covered by Stock Appreciation Rights which are not issued as payment upon exercise. Common Stock which may be issued under the Plan may be either authorized and unissued shares or issued shares which have been reacquired by the Company. No fractional shares of Common Stock shall be issued under the Plan.

( c ) Individual Award Limit . In no event shall a Participant receive an Award or Awards during any one calendar year covering in the aggregate more than 150,000 shares of Common Stock.

Section 5. Eligibility. Only managerial and other key employees shall be eligible to be granted Awards under the Plan. The Compensation Committee shall, from time to time, (i) determine those managerial and other key employees to whom Awards shall be granted and the conditions of each such Award or issue and sale and (ii) grant such Awards. No member of the Compensation Committee while serving as such shall be eligible to receive any Award hereunder.

conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall determine:

( a ) Grant . Stock Options may be granted under the Plan on such terms and conditions not inconsistent with the provisions of the Plan and in such form as the Compensation Committee may from time to time approve. Stock Options may be granted alone, in addition to or in combination with other Awards under the Plan.

( b ) Stock Option Price . The option exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Compensation Committee at the time of grant, but in no event shall the exercise price of an Incentive Stock Option be less than 100% of the Fair Market Value of the Common Stock on the date of the grant of such Incentive Stock Option.

( c ) Option Term . The term of each Stock Option shall be fixed by the Compensation Committee; except that the term of Incentive Stock Options shall not exceed 10 years after the date the Incentive Stock Option is granted.

( d ) Exercisability . A Stock Option shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Compensation Committee at the date of grant.

( e ) Method of Exercise . A Stock Option may be exercised, in whole or in part, by a Participant’s giving written notice of exercise to the Company specifying the number of shares to be purchased. Such notice shall be accompanied by payment in full of the purchase price in cash or, if acceptable to the Compensation Committee in its sole discretion, in shares of Common Stock already owned by the Participant, or by surrendering outstanding Awards denominated in stock or stock units.

( f ) Special Rule for Incentive Stock Options . With respect to Incentive Stock Options granted under the Plan, the aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the number of shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year shall not exceed $100,000 or such other limit as may be required by the Code.

Section 7. Stock Appreciation Rights. Stock Appreciation Rights may be granted under the Plan subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the express terms of the Plan, as the Compensation Committee shall determine:

( a ) Stock Appreciation Rights . A Stock Appreciation Right is an Award entitling a Participant to receive an amount equal to (or if the Compensation Committee shall so determine at the time of grant, less than) the

excess of the Fair Market Value of a share of Common Stock on the date of exercise over the Fair Market Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, or such other price as is set by the Compensation Committee, multiplied by the number of shares of Common Stock with respect to which the Stock Appreciation Right shall have been exercised.

( b ) Grant . A Stock Appreciation Right may be granted in combination with, in addition to or completely independent of a Stock Option or any other Award under the Plan.

( c ) Exercise . A Stock Appreciation Right may be exercised by a Participant in accordance with procedures established by the Compensation Committee, except that in no event shall a Stock Appreciation Right be exercisable within the first six months after the date of grant. The Compensation Committee may also provide that a Stock Appreciation Right shall be automatically exercised on one or more specified dates.

( d ) Form of Payment . Payment upon exercise of a Stock Appreciation Right may be made in cash, in shares of Common Stock, or any combination thereof, as the Compensation Committee shall determine; provided , however , that any Stock Appreciation Right exercised upon or subsequent to the occurrence of a Change in Control (as defined in Section 15) shall be paid in cash.

Section 8. Restricted Awards. Restricted Awards may be granted under the Plan in the form of either Restricted Stock Grants or Restricted Unit Grants. Restricted Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall determine:

( a ) Restricted Stock Grants . A Restricted Stock Grant is an Award of shares of Common Stock to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, restrictions on the sale, assignment, transfer or other disposition of such shares and the requirement that the Participant forfeit such shares back to the Company upon termination of employment prior to vesting.

( b ) Restricted Unit Grants . A Restricted Unit Grant is an Award of units to be paid in cash upon vesting (with each unit having a value equivalent to the Fair Market Value of one share of Common Stock) granted to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units upon termination of employment prior to vesting.

( c ) Grants of Awards . Restricted Awards may be granted under the Plan in such form and on such terms and conditions as the Compensation Committee may from time to time approve. Restricted Awards may be granted

alone, in addition to or in combination with other Awards under the Plan. Subject to the terms of the Plan, the Compensation Committee shall determine the number of Restricted Awards to be granted to a Participant and the Compensation Committee may impose different terms and conditions on any particular Restricted Award made to any Participant. Each Participant receiving a Restricted Stock Grant shall be issued a stock certificate in respect of such shares of Common Stock. Such certificate shall be registered in the name of such Participant, shall be accompanied by a stock power duly executed by such Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award; which certificate evidencing such shares shall be held in custody by the Company until the restrictions thereon shall have lapsed.

( d ) Restriction Period . Restricted Awards shall provide that in order for a Participant’s rights to vest in such Awards, the Participant must remain in the employment of the Company, subject to relief for specified reasons, for a period of time commencing on the date of the Award and ending on such later date or dates as the Compensation Committee may designate at the time of the Award (“Restriction Period”). During the Restriction Period, a Participant may not sell, assign, transfer, pledge, encumber or otherwise dispose of shares of Common Stock received under a Restricted Stock Grant. The Compensation Committee, in its sole discretion, may provide for the lapse of restrictions in installments during the Restriction Period. Upon expiration of the applicable Restriction Period (or lapse of restrictions during the Restriction Period where the restrictions lapse in installments), the Participant shall be entitled to receive his or her Restricted Award or portion thereof, as the case may be.

( e ) Payment of Awards . A Participant shall be entitled to receive payment for a Restricted Unit Grant (or portion thereof) upon expiration of the applicable Restriction Period. Payment in settlement of a Restricted Unit Grant shall be made as soon as practicable following the expiration of the Restriction Period in cash, in shares of Common Stock equal to the number of units granted under the Restricted Unit Grant with respect to which such payment is made, or in any combination thereof, as the Compensation Committee in its sole discretion shall determine. The Compensation Committee may also, in its discretion, permit a Participant to elect to receive, in lieu of shares of unrestricted stock at the conclusion of a Restriction Period, a cash payment equal to the Fair Market Value of the Restricted Stock vesting on the date the restrictions expire.

( f ) Rights as a Stockholder . A Participant shall have, with respect to the shares of Common Stock received under a Restricted Stock Grant, all of the rights of a Stockholder of the Company, including the right to vote the shares, and the right to receive any cash dividends. Stock dividends issued with respect to the shares covered by a Restricted Stock Grant shall be treated as additional shares under the Restricted Stock Grant and shall be subject to the same restrictions and

other terms and conditions that apply to shares under the Restricted Stock Grant with respect to which such dividends are issued.

Section 9. Performance Awards. Performance Awards may be granted under the Plan in the form of either Performance Equity Grants or Performance Unit Grants. Performance Awards may be subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall determine:

( a ) Performance Equity Grants . A Performance Equity Grant is an Award of units (with each unit equivalent in value to one share of Common Stock as it varies throughout the term of the designated performance period) to a Participant and may be subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units or a portion of such units in the event certain performance criteria are not met within a designated period of time.

( b ) Performance Unit Grants . A Performance Unit Grant is an Award of units to be paid in cash upon vesting (with each unit representing such monetary amount as designated by the Compensation Committee) to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units or a portion of such units in the event certain performance criteria are not met within a designated period of time.

( c ) Grants of Awards . Performance Awards may be granted under the Plan in such form as the Compensation Committee may from time to time approve. Performance Awards may be granted alone, in addition to or in combination with other Awards under the Plan. Subject to the terms of the Plan, the Compensation Committee shall determine the number of Performance Awards to be granted to a Participant and the Compensation Committee may impose different terms and conditions on any particular Performance Award made to any Participant.

( d ) Performance Goals and Performance Periods . Performance Awards shall provide that in order for a Participant’s rights to vest in such Awards the Company or the Participant, or a combination thereof, must achieve certain performance goals (“Performance Goals”) over a designated performance period (“Performance Period”). The Performance Goals and Performance Period shall be established by the Compensation Committee, in its sole discretion. The Compensation Committee shall establish Performance Goals for each Performance Period before, or as soon as practicable after, the commencement of the Performance Period. The Compensation Committee may also establish a schedule or formula for such Performance Period setting forth the portion of the Performance Award which will be earned or forfeited based on the degree of achievement of the Performance Goals actually achieved or exceeded. In setting

Performance Goals, the Compensation Committee may use such measures of performance as it deems appropriate.

( e ) Payment of Awards . In the case of a Performance Equity Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the Fair Market Value of a share of Common Stock on the date on which the Compensation Committee determines the number of units earned by the Participant. In the case of a Performance Unit Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the dollar value of each unit times the number of units earned. Payment in settlement of a Performance Award shall be made as soon as practicable following the conclusion of the respective Performance Period in cash, in shares of Common Stock, or in any combination thereof, as the Compensation Committee in its sole discretion shall determine.

Section 10. Other Stock-Based and Combination Awards.

(a) The Compensation Committee may grant other Awards under the Plan pursuant to which Common Stock is or may in the future be acquired, or Awards denominated in stock units, including ones valued using measures other than market value. Such other stock-based Awards may be granted either alone, in addition to or in combination with any other type of Award granted under the Plan.

(b) The Compensation Committee may also grant Awards under the Plan in combination with other Awards or in exchange of Awards, or in combination with or as alternatives to grants or rights under any other employee plan of the Company, including the plan of any acquired entity.

(c) Subject to the provisions of the Plan, the Compensation Committee shall have authority to determine the individuals to whom and the time or times at which such Awards shall be made, the number of shares of Common Stock to be granted or covered pursuant to such Awards, and any and all other conditions and/or terms of the Awards.

Section 11. Deferral Elections. The Compensation Committee may permit a Participant to elect to defer his or her receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be due to such Participant by virtue of the exercise or earn out of an Award made under the Plan. If any such election is permitted, the Compensation Committee may establish rules and procedures for such payment deferrals, including the possible (a) payment or crediting of reasonable interest on such deferred amounts credited in cash, and (b) the payment or crediting dividend equivalents in respect of deferrals credited in units of Common Stock.

Section 12. Termination of Employment. The terms and conditions under which an Award may be exercised after a Participant’s termination of employment shall be determined by the Compensation Committee.

Section 13. Non-transferability of Awards. No Award under the Plan, and no rights or interests therein, shall be assignable or transferable by a Participant except by will or the laws of descent and distribution. During the lifetime of a Participant, Stock Options and Stock Appreciation Rights are exercisable only by, and payments in settlement of Awards will be payable only to, the Participant or his or her legal representative.

Section 14. Adjustments Upon Changes in Capitalization, Etc.

(a) The existence of the Plan and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Board or the Stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of bonds, other debentures, preferred or prior preference stocks, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding.

(b) In the event that a dividend shall be declared upon the Common Stock payable in shares of Common Stock, the number of shares of Common Stock then subject to any Award and the number of shares reserved for issuance pursuant to the Plan but not yet covered by an Award shall be adjusted by adding to each such share the number of shares which would be distributable thereon if such share had been outstanding on the date fixed for determining the Stockholders entitled to receive such stock dividend. In the event that the outstanding shares of Common Stock shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, or changed into or exchanged for cash or property or the right to receive cash or property (but not including any dividend payable in cash or property other than a liquidating distribution), whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation, then there shall be substituted for each share of Common Stock subject to any Award and for each share of Common Stock reserved for issuance pursuant to the Plan but not yet covered by an Award, the number and kind of shares of stock or other securities or cash or property or right to receive cash or property into which each outstanding share of Common Stock shall be so changed or for which each such share shall be exchanged. In the event there shall be any change other than as specified above in this Section 14, in the number or kind of outstanding shares of Common Stock or of any stock or other securities into which such Common Stock shall have been changed or for which it shall have been exchanged, then if the Compensation Committee shall in its sole discretion determine that such change equitably requires an adjustment in the number or kind of shares theretofore reserved for issuance pursuant to the Plan but not yet covered by an Award and of the shares then subject to an Award or Awards, such adjustment shall be made by the Compensation Committee and shall be effective and binding for all purposes of the Plan and each agreement entered into with a Participant under the Plan. In the case of any such substitution or adjustment as provided for in this Section 14, the Award price for each share covered thereby prior to such substitution or adjustment will be the Award price for all shares of stock or other securities or cash or property or right to receive cash or property which shall have been substituted for such share or to which such share shall have been adjusted pursuant to this Section 14. No adjustment or substitution provided for in this Section 14 shall require the Company in any agreement with a Participant to issue a fractional share and the total substitution

or adjustment with respect to each agreement with a Participant shall be limited accordingly. In the event that the number of shares of Common Stock subject to an Award is adjusted pursuant to the provisions of this Section 14, then any Stock Appreciation Rights related to such Award shall be appropriately and equitably adjusted.

(c) In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company’s assets, (iii) a merger or consolidation involving the Company in which the Company is not the surviving corporation or (iv) a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of the Company’s Common Stock receive securities of another corporation and/or other property, including cash, the Compensation Committee shall, in its absolute discretion, have the power to cancel, effective immediately prior to the occurrence of such event, each Stock Option and each Stock Appreciation Right outstanding immediately prior to such event (whether or not then exercisable) and, in consideration of such cancellation, the Company will pay to the Participant an amount in cash for each share of Common Stock subject to such Stock Option or Stock Appreciation Right equal to the excess of (A) the value as determined by the Compensation Committee, in its absolute discretion, of the property (including cash) received by the holder of one share of Common Stock as a result of such event over (B) the exercise price of such Stock Option or Stock Appreciation Right; or provide for the exchange of each Stock Option and Stock Appreciation Right outstanding immediately prior to such event (whether or not then exercisable) for an option on or stock appreciation right with respect to, as appropriate, some or all of the property which a holder of the number of shares of Common Stock subject to such Stock Option or Stock Appreciation Right would have received in such transaction and, incident thereto, make an equitable adjustment as determined by the Compensation Committee, in its absolute discretion, in the exercise price of the option or stock appreciation right, or the number of shares or amount of property subject to the option or stock appreciation right or, if appropriate, provide for a cash payment to the Participant to whom such Stock Option or Stock Appreciation Right was granted in partial consideration for the exchange of the Stock Option or Stock Appreciation Right.

Section 15. Change in Control.

(a) Except as may otherwise be provided in an award agreement, incentive plan, award guidelines or other instrument adopted under this Plan, in the event of a Change in Control (as defined below) of the Company, (i) all Stock Options or Stock Appreciation Rights then outstanding shall become fully exercisable as of the date of the Change in Control, whether or not then exercisable, (ii) all restrictions and conditions of all Restricted Stock Grants and Restricted Unit Grants then outstanding shall be deemed satisfied as of the date of the Change in Control, and (iii) all Performance Equity Grants and Performance Unit Grants shall be deemed to have been fully earned as of the date of the Change in Control.

(b) “Change in Control” means the acquisition or contracting to acquire or otherwise control beneficial ownership of in excess of thirty-five percent (35%) of the then outstanding voting securities of the Company by any person, corporation or other entity and its “affiliates” (as defined in Rule 13d-5(b)(1) promulgated under the Exchange Act, as amended from time to time) excluding, however, for purposes of determining such ownership (but not the number of

shares outstanding) voting securities beneficially owned by members of the Van Every Family and any trust, custodian or fiduciary account for the benefit of any one or more members of the Van Every Family. Van Every Family means the lineal descendants of Salem A. Van Every, Sr. (whether by blood or adoption) and their spouses.

Section 16. Amendment and Termination. Without further approval of the Stockholders, the Board may at any time terminate the Plan, or may amend it from time to time in such respects as the Board may deem advisable, except that the Board may not, without approval of the Stockholders, make any amendment which would (i) require Stockholder approval for Incentive Stock Options granted or to be granted under the Plan to qualify as incentive stock options within the meaning of Section 422 of the Code or (ii) require Stockholder approval under applicable law or the rules of any national securities exchange upon which the Common Stock is listed at the time such amendment is proposed.

Section 17. Miscellaneous.

( a ) Tax Withholding . The Company shall have the right to deduct from any settlement, including the delivery or vesting of shares, made under the Plan any federal, state or local taxes of any kind required by law to be withheld with respect to such payments or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. If Common Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

( b ) No Right To Employment . Neither the adoption of the Plan nor the granting of any Award hereunder shall confer upon any employee of the Company any right to continued employment with the Company, nor shall it interfere in any way with the right of the Company to terminate the employment of any of its employees at any time, with or without cause.

( c ) Unfunded Plan . The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Any liability of the Company to any person with respect to any Award under the Plan shall be based solely upon any contractual obligations that may be effected pursuant to the Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.

( d ) Payments to Trust . The Compensation Committee is authorized to cause to be established a trust agreement or several trust agreements whereunder the Company may make payments of amounts due or to become due to Participants in the Plan.

( e ) Engaging in Competition With Company . In the event a Participant’s employment with the Company is terminated for any reason whatsoever, and within 18 months after the date thereof such Participant accepts employment with any competitor of, or otherwise engages in competition with, the Company, the Compensation Committee, in its sole discretion, may require such Participant to return to the Company the economic value of any Award which is realized or obtained (measured at the date of exercise, vesting or payment) by such Participant

at any time during the period beginning on that date which is six months prior to the date of such Participant’s termination of employment with the Company.

( f ) Securities Law Restrictions . No shares of Common Stock shall be issued under the Plan unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable Federal and state securities laws. Certificates for shares of Common Stock delivered under the Plan may be subject to such stop-transfer orders and other restrictions as the Compensation Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state securities law. The Compensation Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

( g ) Award Agreement . Each Participant receiving an Award under the Plan shall enter into an agreement with the Company in a form specified by the Compensation Committee agreeing to the terms and conditions of the Award and such related matters as the Compensation Committee shall, in its sole discretion, determine.

( h ) Costs of Plan . The costs and expenses of administering the Plan shall be borne by the Company.

( i ) Governing Law . The Plan and all actions taken thereunder shall be governed by and construed in accordance with the laws of the State of North Carolina.

Exhibit 10.2

LANCE, INC.

2003 KEY EMPLOYEE STOCK PLAN
(As amended through February 9, 2007)

TABLE OF CONTENTS


Section 1.	Purpose	2

Section 2.	Definitions	2

Section 3.	Administration	5

Section 4.	Duration of and Common Stock Subject to Plan	5

Section 5.	Eligibility	6

Section 6.	Stock Options	6

Section 7.	Stock Appreciation Rights	7

Section 8.	Restricted Awards	8

Section 9.	Performance Awards	9

Section 10.	Other Stock-Based and Combination Awards	11

Section 11.	Deferral Elections	11

Section 12.	Termination of Employment	11

Section 13.	Non-transferability of Awards	11

Section 14.	Adjustments Upon Changes in Capitalization, Etc.	12

Section 15.	Change in Control	13

Section 16.	Amendment and Termination	14

Section 17.	Miscellaneous	14

LANCE, INC.

2003 KEY EMPLOYEE STOCK PLAN

Section 1. Purpose. The purpose of the Lance, Inc. 2003 Key Employee Stock Plan (the “Plan”) is to attract and retain managerial and other key employees, and to reward such employees for making major contributions to the success of Lance, Inc. (the “Company”). The Plan is designed to meet these objectives by offering performance-based stock and cash incentives and other equity-based incentive awards, thereby providing such employees with a proprietary interest in the long term growth and performance of the Company.

Section 2. Definitions. For purposes of the Plan, unless the context clearly indicates otherwise, the following terms shall have the meanings set forth below:

(a) “Award” ( collectively, “Awards” ) means an award or grant made to a Participant under Sections 6 through 10, inclusive, of the Plan.

(b) “Beneficial Owner” has the meaning ascribed to such term in Section 13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

(d) “Code” means the Internal Revenue Code of 1986, as in effect from time to time, or any successor thereto, together with rules, regulations and interpretations promulgated thereunder.

(e) “Common Stock” means the $.83 1/3 par value Common Stock of the Company or any security of the Company issued in substitution, exchange or lieu thereof pursuant to Section 14 hereof.

(f) “Company” means Lance, Inc., a North Carolina corporation, and any subsidiary corporations within the meaning of Section 424(f) of the Code, as well as any successor corporation or corporations thereto.

(g) “Compensation Committee” means the Compensation Committee of the Board; provided , that (i) with respect to any Awards to any Insider, Compensation Committee means all of the members of the Compensation Committee who are “non-employee” directors within the meaning of Rule 16b-3 adopted under the Exchange Act, and (ii) with respect to any Awards to any key employees who are Named Executive Officers intended to comply with the Performance-Based Exception, Compensation Committee means all of the members of the Compensation Committee who are “outside directors” within the meaning of Section 162(m) of the Code.

(h) “Director” means a member of the Board.

(i) “Disability” means the inability, by reason of physical or mental infirmity or both, of an individual to perform satisfactorily the duties then assigned to such individual or any other duties the Company is willing to assign to such individual for which compensation is payable. Disability shall be determined by the Compensation Committee based upon such evidence as the Compensation Committee shall deem sufficient and, upon medical evidence, if available, and, in the discretion of the Compensation Committee, upon certification of such Disability by an independent qualified physician.

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time, or any successor statute.

(k) “Fair Market Value,” with respect to a share of the Common Stock at a particular time, shall be that value as determined by the Compensation Committee which shall be (i) if such Common Stock is listed on a national securities exchange or traded on the NASDAQ Stock Market, the closing price for sales of the Common Stock on a national securities exchange or the NASDAQ Stock Market on which the Common Stock is principally traded on said date, or, if no sales occur on said date, then on the next preceding date on which there were such sales of Common Stock, (ii) if the Common Stock shall not be listed on a national securities exchange or traded on the National Market System, the mean between the closing bid and asked prices last reported by the National Association of Securities Dealers, Inc. for the over-the-counter market on said date or, if no bid and asked prices are reported on said date, then on the next preceding date on which there were such quotations, or (iii) if at any time quotations for the Common Stock shall not be reported by the National Association of Securities Dealers, Inc. for the over-the-counter market and the Common Stock shall not be listed on any national securities exchange or traded on the NASDAQ Stock Market, the fair market value determined by the Compensation Committee in such manner as it may deem reasonable.

(l) “Incentive Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is intended to be and is specifically designated as an “incentive stock option” within the meaning of Section 422 of the Code.

(m) “Insider” means an individual who is, on the relevant date, an officer, director or ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act and the rules thereunder.

(n) “Member of the Van Every Family” means (i) a lineal descendant of Salem A. Van Every, Sr., including adopted persons as well as persons related by blood, (ii) a spouse of an individual described in clause (i) of this Paragraph

2(m) or (iii) a trust, estate, custodian and other fiduciary or similar account for an individual described in clause (i) or (ii) of this Paragraph 2(m).

(o) “Named Executive Officer” means, for a calendar year, a Participant who is one of the group of “covered employees” for such calendar year within the meaning of Code Section 162(m) or any successor statute.

(p) “Non-Qualified Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is not an Incentive Stock Option.

(q) “Outside Person” means any Person other than (i) a Member of the Van Every Family, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (iii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Company.

(r) “Participant” means an employee of the Company who is granted an Award under the Plan.

(s) “Performance Award” means an Award granted pursuant to the provisions of Section 9 of the Plan the vesting of which is contingent on performance attainment.

(t) “Performance-Based Exception” means the performance-based exception set forth in Code Section 162(m)(4)(C) from the deductibility limitations of Code Section 162(m).

(u) “Performance Equity Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 9 of the Plan.

(v) “Performance Unit Grant” means an Award of monetary units granted pursuant to the provisions of Section 9 of the Plan.

(w) “Person” has the meaning ascribed to said term in Section 3(a)(9) of the Exchange Act as modified and used in Sections 13(d) and 14(d) of the Exchange Act, including a “group” as defined in Section 13(d) of the Exchange Act.

(x) “Plan” means the Lance, Inc. 2003 Key Employee Stock Plan as set forth herein, as the same may be hereafter amended and from time to time in effect.

(y) “Restricted Award” means an Award granted pursuant to the provisions of Section 8 of the Plan.

(z) “Restricted Stock Grant” means an Award of shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan.

(aa) “Restricted Unit Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan.

(bb) “Retirement” means the termination of an employee’s employment with the Company at any time after the last day of the calendar month immediately preceding the calendar month in which the employee attains the age of 60 years.

(cc) “Stock Appreciation Right” means an Award to benefit from the appreciation of Common Stock granted pursuant to the provisions of Section 7 of the Plan.

(dd) “Stock Option” means an Award to purchase shares of Common Stock granted pursuant to the provisions of Section 6 of the Plan.

Section 3. Administration.

(a) The Plan shall be administered by the Compensation Committee.

(b) The Compensation Committee is authorized to grant Awards under the Plan, to construe and interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the implementation of the Plan and to make all other determinations necessary or advisable for the administration of the Plan. Any determination, decision or action of the Compensation Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive and binding upon all persons participating in the Plan and any person validly claiming under or through persons participating in the Plan. The Company shall effect the granting of Awards under the Plan in accordance with the determinations made by the Compensation Committee, by execution of instruments in writing in such form as are approved by the Compensation Committee.

Section 4. Duration of and Common Stock Subject to Plan.

(a) Term . The Plan shall be effective on April 24, 2003, subject to approval by a plurality of the shares voting on approval of the Plan at the Annual Meeting of Stockholders held on said date or any adjournment thereof. The Plan shall terminate on April 23, 2008.

(b) Shares of Common Stock Subject to Plan . The maximum number of shares of Common Stock with respect to which Awards may be granted under the Plan, subject to adjustment as provided in Section 14 of the Plan, shall be 1,500,000 shares of the total authorized shares of the Common Stock. For the purpose of computing the total number of shares of Common Stock available for Awards under the Plan, there shall be counted against the foregoing limitation the number of shares of Common Stock subject to issuance upon exercise or settlement of Awards and the number of shares of Common Stock which equal the value of

Restricted Unit Grants and Performance Equity Grants and other stock-based Awards in each case determined as of the dates on which such Awards are granted. If any Award is canceled, terminates, expires or lapses for any reason, any shares subject to such Award shall not count against the aggregate number of shares that may be issued under the Plan as set forth above. If, in accordance with the terms of the Plan, a Participant pays the option exercise price for a Stock Option or satisfies any tax withholding requirement in connection with the exercise of a Stock Option by either tendering previously owned shares or having the Company withhold shares, then such shares surrendered to pay the option exercise price or used to satisfy such tax withholding requirements shall not count against the aggregate number of shares that may be issued under the Plan as set forth above. The following items shall not count against the aggregate number of shares that may be issued under the Plan as set forth above: (i) the payment in cash of dividends or dividend equivalents under any outstanding Award; (ii) any Award that is settled in cash rather than by issuance of shares; or (iii) Awards granted through the assumption of, or in substitution for, outstanding Awards previously granted to individuals who become key employees as a result of a merger, consolidation, acquisition or other corporation transaction involving the Company or any subsidiary of the Company. Common Stock which may be issued under the Plan may be either authorized and unissued shares or issued shares which have been reacquired by the Company. No fractional shares of Common Stock shall be issued under the Plan.

(c) Individual Award Limit . In no event shall a Participant receive an Award or Awards during any one calendar year covering in the aggregate more than 150,000 shares of Common Stock.

(d) Restricted Award Limitations . In no event shall the Compensation Committee grant Restricted Awards covering in the aggregate more than 200,000 shares of Common Stock.

Section 6. Stock Options. Stock Options may be granted under the Plan in the form of Incentive Stock Options or Non-Qualified Stock Options; and such Stock Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall determine:

(a) Grant . Stock Options may be granted under the Plan on such terms and conditions not inconsistent with the provisions of the Plan and in such form as the Compensation Committee may from time to time approve. Stock Options may be granted alone, in addition to or in combination with other Awards under the Plan.

(b) Stock Option Price . The option exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Compensation Committee at the time of grant, but in no event shall the exercise price of an Incentive Stock Option be less than 100% of the Fair Market Value of the Common Stock on the date of the grant of such Incentive Stock Option.

(c) Option Term . The term of each Stock Option shall be fixed by the Compensation Committee; except that the term of Incentive Stock Options shall not exceed 10 years after the date the Incentive Stock Option is granted.

(d) Exercisability . A Stock Option shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Compensation Committee at the date of grant.

(e) Method of Exercise . A Stock Option may be exercised, in whole or in part, by a Participant’s giving written notice of exercise to the Company specifying the number of shares to be purchased. Such notice shall be accompanied by payment in full of the purchase price in cash or, if acceptable to the Compensation Committee in its sole discretion, in shares of Common Stock already owned by the Participant, or by surrendering outstanding Awards denominated in stock or stock units.

(f) Special Rule for Incentive Stock Options . With respect to Incentive Stock Options granted under the Plan, the aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the number of shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year shall not exceed $100,000 or such other limit as may be required by the Code.

( g ) Repricing of Stock Options. In no event shall any outstanding Stock Option be repriced to a lower option exercise price per share of Common Stock at any time during the term of such Stock Option without the prior affirmative vote of holders of a majority of the shares of Common Stock of the Company present at a stockholders meeting in person or represented by proxy and entitled to vote thereon.

(a) Stock Appreciation Rights . A Stock Appreciation Right is an Award entitling a Participant to receive an amount equal to (or if the Compensation Committee shall so determine at the time of grant, less than) the excess of the Fair Market Value of a share of Common Stock on the date of exercise over the Fair Market Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, or such other price as is set by the

Compensation Committee, multiplied by the number of shares of Common Stock with respect to which the Stock Appreciation Right shall have been exercised.

(b) Grant . A Stock Appreciation Right may be granted in combination with, in addition to or completely independent of a Stock Option or any other Award under the Plan.

(c) Exercise . A Stock Appreciation Right may be exercised by a Participant in accordance with procedures established by the Compensation Committee, except that in no event shall a Stock Appreciation Right be exercisable within the first six months after the date of grant. The Compensation Committee may also provide that a Stock Appreciation Right shall be automatically exercised on one or more specified dates.

(d) Form of Payment . Payment upon exercise of a Stock Appreciation Right may be made in cash, in shares of Common Stock, or any combination thereof, as the Compensation Committee shall determine; provided , however , that any Stock Appreciation Right exercised upon or subsequent to the occurrence of a Change in Control (as defined in Section 15) shall be paid in cash.

(a) Restricted Stock Grants . A Restricted Stock Grant is an Award of shares of Common Stock to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, restrictions on the sale, assignment, transfer or other disposition of such shares and the requirement that the Participant forfeit such shares back to the Company upon termination of employment prior to vesting.

(b) Restricted Unit Grants . A Restricted Unit Grant is an Award of units to be paid in cash upon vesting (with each unit having a value equivalent to the Fair Market Value of one share of Common Stock) granted to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units upon termination of employment prior to vesting.

(c) Grants of Awards . Restricted Awards may be granted under the Plan in such form and on such terms and conditions as the Compensation Committee may from time to time approve. Restricted Awards may be granted alone, in addition to or in combination with other Awards under the Plan. Subject to the terms of the Plan, the Compensation Committee shall determine the number of Restricted Awards to be granted to a Participant and the Compensation Committee may impose different terms and conditions on any particular

Restricted Award made to any Participant. Each Participant receiving a Restricted Stock Grant shall be issued a stock certificate in respect of such shares of Common Stock. Such certificate shall be registered in the name of such Participant, shall be accompanied by a stock power duly executed by such Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award; which certificate evidencing such shares shall be held in custody by the Company until the restrictions thereon shall have lapsed.

(d) Restriction Period . Restricted Awards shall provide that in order for a Participant’s rights to vest in such Awards, the Participant must remain in the employment of the Company, subject to relief for specified reasons, for a period of time commencing on the date of the Award and ending on such later date or dates as the Compensation Committee may designate at the time of the Award (“Restriction Period”). During the Restriction Period, a Participant may not sell, assign, transfer, pledge, encumber or otherwise dispose of shares of Common Stock received under a Restricted Stock Grant. The Compensation Committee, in its sole discretion, may provide for the lapse of restrictions in installments during the Restriction Period. Upon expiration of the applicable Restriction Period (or lapse of restrictions during the Restriction Period where the restrictions lapse in installments), the Participant shall be entitled to receive his or her Restricted Award or portion thereof, as the case may be.

(e) Payment of Awards . A Participant shall be entitled to receive payment for a Restricted Unit Grant (or portion thereof) upon expiration of the applicable Restriction Period. Payment in settlement of a Restricted Unit Grant shall be made as soon as practicable following the expiration of the Restriction Period in cash, in shares of Common Stock equal to the number of units granted under the Restricted Unit Grant with respect to which such payment is made, or in any combination thereof, as the Compensation Committee in its sole discretion shall determine. The Compensation Committee may also, in its discretion, permit a Participant to elect to receive, in lieu of shares of unrestricted stock at the conclusion of a Restriction Period, a cash payment equal to the Fair Market Value of the Restricted Stock vesting on the date the restrictions expire.

(f) Rights as a Stockholder . A Participant shall have, with respect to the shares of Common Stock received under a Restricted Stock Grant, all of the rights of a Stockholder of the Company, including the right to vote the shares, and the right to receive any cash dividends. Stock dividends issued with respect to the shares covered by a Restricted Stock Grant shall be treated as additional shares under the Restricted Stock Grant and shall be subject to the same restrictions and other terms and conditions that apply to shares under the Restricted Stock Grant with respect to which such dividends are issued.

terms and conditions, not inconsistent with the express provisions of the Plan, as the Compensation Committee shall determine:

(a) Performance Equity Grants . A Performance Equity Grant is an Award of units (with each unit equivalent in value to one share of Common Stock as it varies throughout the term of the designated performance period) to a Participant and may be subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units or a portion of such units in the event certain performance criteria are not met within a designated period of time.

(b) Performance Unit Grants . A Performance Unit Grant is an Award of units to be paid in cash upon vesting (with each unit representing such monetary amount as designated by the Compensation Committee) to a Participant subject to such terms and conditions as the Compensation Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units or a portion of such units in the event certain performance criteria are not met within a designated period of time.

(c) Grants of Awards . Performance Awards may be granted under the Plan in such form as the Compensation Committee may from time to time approve. Performance Awards may be granted alone, in addition to or in combination with other Awards under the Plan. Subject to the terms of the Plan, the Compensation Committee shall determine the number of Performance Awards to be granted to a Participant and the Compensation Committee may impose different terms and conditions on any particular Performance Award made to any Participant.

(d) Performance Goals and Performance Periods . Performance Awards shall provide that in order for a Participant’s rights to vest in such Awards the Company or the Participant, or a combination thereof, must achieve certain performance goals (“Performance Goals”) over a designated performance period (“Performance Period”). The Performance Goals and Performance Period shall be established by the Compensation Committee, in its sole discretion. The Compensation Committee shall establish Performance Goals for each Performance Period before, or as soon as practicable after, the commencement of the Performance Period. The Compensation Committee may also establish a schedule or formula for such Performance Period setting forth the portion of the Performance Award which will be earned or forfeited based on the degree of achievement of the Performance Goals actually achieved or exceeded. In setting Performance Goals, the Compensation Committee may use such measures of performance as it deems appropriate.

(e) Payment of Awards . In the case of a Performance Equity Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the Fair Market Value of a share of Common Stock on the date on which the Compensation Committee determines the number of units earned by

the Participant. In the case of a Performance Unit Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the dollar value of each unit times the number of units earned. Payment in settlement of a Performance Award shall be made as soon as practicable following the conclusion of the respective Performance Period in cash, in shares of Common Stock, or in any combination thereof, as the Compensation Committee in its sole discretion shall determine.

Section 10. Other Stock-Based and Combination Awards.

Section 14. Adjustments Upon Changes in Capitalization, Etc.

(c) In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company’s assets, (iii) a merger or consolidation involving the Company

in which the Company is not the surviving corporation or (iv) a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of the Company’s Common Stock receive securities of another corporation and/or other property, including cash, the Compensation Committee shall, in its absolute discretion, have the power to cancel, effective immediately prior to the occurrence of such event, each Stock Option and each Stock Appreciation Right outstanding immediately prior to such event (whether or not then exercisable) and, in consideration of such cancellation, the Company will pay to the Participant an amount in cash for each share of Common Stock subject to such Stock Option or Stock Appreciation Right equal to the excess of (A) the value as determined by the Compensation Committee, in its absolute discretion, of the property (including cash) received by the holder of one share of Common Stock as a result of such event over (B) the exercise price of such Stock Option or Stock Appreciation Right; or provide for the exchange of each Stock Option and Stock Appreciation Right outstanding immediately prior to such event (whether or not then exercisable) for an option on or stock appreciation right with respect to, as appropriate, some or all of the property which a holder of the number of shares of Common Stock subject to such Stock Option or Stock Appreciation Right would have received in such transaction and, incident thereto, make an equitable adjustment as determined by the Compensation Committee, in its absolute discretion, in the exercise price of the option or stock appreciation right, or the number of shares or amount of property subject to the option or stock appreciation right or, if appropriate, provide for a cash payment to the Participant to whom such Stock Option or Stock Appreciation Right was granted in partial consideration for the exchange of the Stock Option or Stock Appreciation Right.

Section 15. Change in Control.

(b) “Change in Control” means, and shall be deemed to have occurred upon, the first to occur of any of the following events:

	(i)		Any Outside Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or

	(ii)		During any period of two (2) consecutive years (not including any period prior to the date hereof), individuals who at the beginning of such period constitute the Board (and any new Director, whose nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Directors then

			in office who either were Directors at the beginning of the period or whose nomination for election was so approved) cease for any reason to constitute a majority of the members of the Board; or

	(iii)		The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company’s assets other than a sale or disposition of all or substantially all of the Company’s assets to an entity at least sixty percent (60%) of the combined voting power of the voting securities of which are owned by the stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition; or

	(iv)		The stockholders of the Company approve a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.

However, in no event shall a “Change in Control” be deemed to have occurred with respect to a Participant if that Participant is part of a purchasing group which consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the acquiring company or group or surviving entity (the “Purchaser”) except for ownership of less than one percent (1%) of the equity of the Purchaser.

Section 17. Miscellaneous.

(a) Tax Withholding . The Company shall have the right to deduct from any settlement, including the delivery or vesting of shares, made under the Plan any federal, state or local taxes of any kind required by law to be withheld with respect to such payments or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for

the payment of such taxes. If Common Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

(b) No Right To Employment . Neither the adoption of the Plan nor the granting of any Award hereunder shall confer upon any employee of the Company any right to continued employment with the Company, nor shall it interfere in any way with the right of the Company to terminate the employment of any of its employees at any time, with or without cause.

(c) Unfunded Plan . The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Any liability of the Company to any person with respect to any Award under the Plan shall be based solely upon any contractual obligations that may be effected pursuant to the Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.

(d) Payments to Trust . The Compensation Committee is authorized to cause to be established a trust agreement or several trust agreements whereunder the Company may make payments of amounts due or to become due to Participants in the Plan.

(e) Engaging in Competition With Company . In the event a Participant’s employment with the Company is terminated for any reason whatsoever, and within 18 months after the date thereof such Participant accepts employment with any competitor of, or otherwise engages in competition with, the Company, the Compensation Committee, in its sole discretion, may require such Participant to return to the Company the economic value of any Award which is realized or obtained (measured at the date of exercise, vesting or payment) by such Participant at any time during the period beginning on that date which is six months prior to the date of such Participant’s termination of employment with the Company.

(f) Securities Law Restrictions . No shares of Common Stock shall be issued under the Plan unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable Federal and state securities laws. Certificates for shares of Common Stock delivered under the Plan may be subject to such stop-transfer orders and other restrictions as the Compensation Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state securities law. The Compensation Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(g) Award Agreement . Each Participant receiving an Award under the Plan shall enter into an agreement with the Company in a form specified by the Compensation Committee agreeing to the terms and conditions of the Award and such related matters as the Compensation Committee shall, in its sole discretion, determine.

(h) Costs of Plan . The costs and expenses of administering the Plan shall be borne by the Company.

(i) Governing Law . The Plan and all actions taken thereunder shall be governed by and construed in accordance with the laws of the State of North Carolina.

Exhibit 10.3

LANCE, INC.

2007 Three-Year Performance Incentive Plan for Officers


Purposes and Introduction		The 2007 Three-Year Performance Incentive Plan for Officers provides for Performance Awards under the Lance, Inc. 2007 Key Employee Incentive Plan (the “Incentive Plan”). Except as otherwise expressly defined herein, capitalized terms shall be as defined in the Incentive Plan.

		The primary purposes of the 2007 Three-Year Performance Incentive Plan for Officers (the “2007 Plan”) are to:

		• Align executives’ interests with those of stockholders by linking a substantial portion of compensation to the Company’s average Return on Capital Employed (ROCE) over three fiscal years based on the Company’s 2007-2009 Operating Plan.

		• Provide a way to attract and retain key executives and managers who are critical to Lance’s future success.

		• Provide competitive total compensation for executives and managers commensurate with Company performance.

		To achieve the maximum motivational impact, performance measures, Plan goals and the awards that will be received for meeting those goals will be communicated to participants as soon as practical after the 2007 Plan is approved by the Compensation Committee of the Board of Directors.

		Each participant will be assigned a Target Incentive, stated as a percent of base salary. The Target Incentive Awards, or a greater or lesser amount, will be granted after the end of the three fiscal years, 2007 through 2009 (the “Performance Period”), based on the attainment of predetermined goals.

		For 2007, participants will be eligible to earn incentive awards based on the Company’s three-year average ROCE against specific goals as described below.

		• ROCE is calculated for each fiscal year during the Performance Period as follows:

		(Net Income + Interest Expense) x (1 — Tax Rate) Average Equity + Average Net Debt


		Tax Rate for ROCE shall be the Company’s actual total effective income tax rate.

		Average Net Debt shall be the Company’s average debt less average cash.

		Average amounts for ROCE shall be calculated on a 12-month basis.

		Base salary shall be the annual rate of base compensation for the 2007 fiscal year which is set no later than April of such fiscal year; provided that for any award intended to satisfy the Performance-Based Exception, base salary shall be the annual rate of base compensation for the fiscal year which is set no later than March 31 of such fiscal year.

Performance Period		The period over which performance will be measured is the Company’s three fiscal years, 2007 through 2009.

Eligibility and Participation		Eligibility in the Plan is limited to Executive Officers and managers who are key to Lance’s success. The Compensation Committee will review and approve participants nominated by the President and Chief Executive Officer. Participation in the 2007 Plan does not guarantee participation in any subsequent long-term incentive plans but will be reevaluated and determined on an annual basis.

		Attachment A includes the list of 2007 Plan participants approved by the Compensation Committee on February 8, 2007.

Target Incentives and Performance Measures		Each participant will be assigned a Target Incentive expressed as a percentage of his or her base salary. Participants may be assigned to a Performance Tier by position, by salary level or based on other factors as determined by the President and Chief Executive Officer. If the duties of a participant change significantly during the Performance Period, the President and Chief Executive Officer, with the approval of the Compensation Committee, may change the Target Incentive for such participant for the remaining portion of the Performance Period on a pro rata basis.

		The 2007 through 2009 financial performance measure for the Company as a whole is shown below. Specific goals and related payouts are also shown below.


	Threshold			Target			Maximum
Lance, Inc. average ROCE		11.0	%		12.0	%		14.0	%
Award Level Funded		50	%		100	%		400	%


		Percent of payout will be determined on a straight line basis between Threshold and Target and between Target and Maximum. There will be no payouts unless the Threshold performance measure is reached.

		The performance measure will be communicated to each participant as soon as practicable after it has been established. Final Target Incentive Awards will be calculated after the Compensation Committee has reviewed the Company’s audited financial statements for 2007 through 2009 and determined the performance level achieved.

		The following definitions for the terms Maximum, Target and Threshold should help set the goals for the Performance Period, as well as evaluate the payouts:

		• Maximum: Excellent; deserves payout above Target

		• Target: Normal or expected performance; deserves Target payout

		• Threshold: Lowest level of performance deserving a payout

		Attachment A lists the Target Incentives for each participant for the 2007 Plan as determined by the Compensation Committee. Target Incentives will be communicated to each participant as close to the beginning of the year as practicable, in writing. Target Incentives will be calculated by multiplying each participant’s base salary by the appropriate Performance Tiers and percentages, as described below.


				Percentage of Base Salary
		Performance Tier		for 2007-2009 Target Incentives
		1 2 3		30% 25% 20%


		Final awards will be calculated, paid and granted after the Compensation Committee has reviewed the Company’s audited financial statements for 2007 through 2009 and determined the performance levels achieved.

Awards		Each participant shall receive cash equal to 50% in value of his or her award and 50% in value will be in shares of Common Stock, except that the President and Chief Executive Officer will receive cash equal to 100% in value of his award and no shares of Common Stock.


		The number of shares of the Company’s Common Stock granted will equal the applicable dollar value divided by the closing price for the Company’s Common Stock on the date of grant. The shares of Common Stock will be fully vested on the date of grant.

		For purposes of the 2007 Plan, the date of grant of shares of Common Stock will be the date established by the Compensation Committee after the applicable performance level has been determined.

Form and Timing of Awards		Awards will be made as soon as practicable after performance measures are calculated and approved by the Compensation Committee. All awards will be rounded to the nearest multiple of $100 or up to the next whole share, as the case may be.

Change In Status		An employee hired into an eligible position during the Performance Period may participate in the 2007 Plan for the balance of the Performance Period on a pro rata basis.

Certain Terminations of Employment		In the event a participant voluntarily terminates employment (other than Retirement) or is terminated involuntarily before the end of the Performance Period, the participant shall not receive any award hereunder. In the event of death, Disability or Retirement before the end of the Performance Period, any award will be determined after the end of the Performance Period based on actual performance and paid out on a pro rata basis all in cash.

		If the participant’s employment terminates after the end of the Performance Period but before the applicable grant date, then the participant will receive the award based on the performance results and paid out all in cash.

Change In Control		In the event of a Change in Control, pro rata payouts will be made all in cash at the greater of (1) Target Incentive or (2) actual results for the completed fiscal years preceding the Change in Control, with such pro ration based on the number of days in the Performance Period preceding the Change in Control. Payouts will be made within 30 days after the relevant transaction has been completed.

Withholding		The Company shall withhold from awards any Federal, foreign, state or local income or other taxes required to be withheld.

Communications		Progress reports should be made to participants annually, showing performance results.


Executive Officers		Notwithstanding any provisions to the contrary above, participation, awards and prorations for Executive Officers, including the President and Chief Executive Officer, shall be approved by the Compensation Committee.

Stockholder Approval		The 2007 Plan and the awards hereunder are made pursuant to the Incentive Plan, which is subject to approval by the Company’s stockholders at the Annual Meeting of Stockholders to be held on April 26, 2007. Any award made under the 2007 Plan before the Incentive Plan is approved by the Company’s stockholders is conditioned upon such approval and will be null and void if the Incentive Plan is not so approved.

Governance		The Compensation Committee of the Board of Directors of Lance, Inc. is ultimately responsible for the administration and governance of the Plan. Actions requiring Committee approval include final determination of plan eligibility and participation, identification of performance measures and goals, final award components and determination and amendments to the Plan. The Committee shall adjust any award due to extraordinary events such as acquisitions, dispositions, required accounting adjustments or similar events, all as specified in Section 11(d) of the Incentive Plan. The decisions of the Committee shall be conclusive and binding on all participants.

Attachment A
2007 Three-Year Performance Incentive Plan for Officers


		Award			Target
Name	Title	Percentage			Incentive

David V. Singer	President and Chief Executive Officer		30	%	$	165,000

R. D. Puckett	Executive Vice President, Chief Financial Officer and Secretary		25	%	$	91,875

Glenn A. Patcha	Senior Vice President — Sales and Marketing		*	%	$	*

E. D. Leake	Vice President — Human Resources		25	%	$	56,250

F. I. Lewis	Vice President — Sales		25	%	$	66,300

B. W. Thompson	Vice President — Supply Chain		25	%	$	68,750

M. E. Wicklund	Controller and Assistant Secretary		*	%	$	*

Amounts are omitted for participants other than the Chief Executive Officer, the Chief Financial Officer and the executive officers who were named in the Summary Compensation Table of the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders.

LANCE, INC.

2007 Annual Performance Incentive Plan for Officers


Purposes and Introduction	The 2007 Annual Performance Incentive Plan provides for Performance Awards under the Lance, Inc. 2007 Key Employee Incentive Plan (the “Incentive Plan”). Except as otherwise expressly defined herein, capitalized terms shall be as defined in the Incentive Plan.

	The primary purposes of the 2007 Annual Performance Incentive Plan for Officers (the “2007 Plan”) are to:

		•	Motivate behaviors that lead to the successful achievement of specific sales, financial and operations goals that support Lance’s stated business strategy.

		•	Emphasize link between participants’ performance and rewards for meeting predetermined, specific goals.

		•	Focus participant’s attention on operational effectiveness from both an earnings and an investment perspective.

		•	Promote the performance orientation at Lance and communicate to employees that greater responsibility carries greater rewards.

	For 2007, participants will be eligible to earn incentive awards based on the performance measures listed on Exhibit A hereto and defined as follows:

		1.	Corporate Earnings Per Share (“Corporate EPS”) is defined as the fully diluted earnings per share of the Company for the 2007 fiscal year, excluding special items, which are significant one-time income or expense items.

		2.	Net Sales Dollars is defined as sales and other operating revenue, net of returns, allowances, discounts and other sales deduction items.

		3.	Economic Profit is defined as net operating profit after income taxes, less cost of capital charge of 9.0% on average capital employed.

	To achieve the maximum motivational impact, plan goals and the awards that will be received for meeting those goals will be communicated to participants as soon as practical after the 2007 Plan is approved by the Compensation Committee of the Board of Directors.


		Each participant will be assigned a Target Incentive, stated as a percent of base salary. The Target Incentive Award, or a greater or lesser amount, will be earned at the end of the Plan Year based on the attainment of predetermined goals.

		Base salary shall be the annual rate of base compensation for the Plan Year which is set no later than April of such Plan Year; provided that for any award intended to satisfy the Performance-Based Exception, base salary shall be the annual rate of base compensation for the Plan Year which is set no later than March 31 of such Plan Year.

		Not later than 75 days after fiscal year-end, 100% of the awards earned will be payable to participants in cash.

Plan Year		The period over which performance will be measured is the Company’s 2007 fiscal year (the “Plan Year”).

Eligibility and Participation		Eligibility in the Plan is limited to Officers of Lance who are key to Lance’s success. The Compensation Committee of the Board of Directors will review and approve participants nominated by the President and Chief Executive Officer. Participation in one year does not guarantee participation in a following year, but instead will be reevaluated and determined on an annual basis.

		Participants in the Plan may not participate in any other annual incentive plan (e.g., sales incentives, etc.) offered by Lance or its affiliates. Exhibit B includes the list of 2007 participants approved by the Compensation Committee at its February 8, 2007 meeting.

Target Incentive Awards		Each participant will be assigned a Target Incentive expressed as a percentage of his or her base salary. Participants may be assigned Target Incentives by position, by salary level or based on other factors as determined by the Compensation Committee.

		Target Incentives will be reevaluated at least every other year, if not annually. If the job responsibilities of a position change during the year, or base salary is increased significantly, the Target Incentive shall be revised as appropriate.

		Exhibit B lists the Target Incentive for each participant for the Plan Year. Target Incentives will be communicated to each participant as close to the beginning of the year as practicable, in writing. Final awards will be calculated by multiplying each participant’s Target Incentive by the appropriate percentage (based on performance for the year, as described below).


Performance Measures and Award Funding		The 2007 performance measures are on Exhibit A attached hereto.


	Threshold			Target			Maximum
Award Level Funded		50	%		100	%		200	%


	Percent of payout will be determined on a straight line basis from Threshold to Target and from Target to Maximum. There will be no payout unless the Threshold for the applicable performance measure is reached. The payout for Net Sales Dollars will not exceed Threshold unless Corporate EPS equals or exceeds Threshold.

	The performance measures will be communicated to each participant as soon as practicable after they have been established. Final Target Incentive Awards will be calculated after the Compensation Committee has reviewed the Company’s audited financial statements for 2007 and determined the performance level achieved.

	Threshold, Target and Maximum levels will be defined at the beginning of each Plan Year for each performance measure.

	The following definitions for the terms Maximum, Target and Threshold should help set the goals for each year, as well as evaluate the payouts:

	•	Maximum: Excellent; deserves an above-market incentive

	•	Target: Normal or expected performance; deserves market-level incentive

	•	Threshold: Lowest level of performance deserving payment above base salary; deserves below-market incentive

Individual Performance	Each Officer will receive 45% of his or her Target Incentive Award based on Corporate Earnings Per Share, 35% of his or her Target Incentive Award based on Net Sales Dollars and 20% of his or her Target Incentive Award based on Economic Profit.

Form and Timing of Payments	Final award payments will be made in cash as soon as practicable after award amounts are approved by the Compensation Committee of the Board of Directors, generally within 75 days after the end of the Company’s 2007 fiscal year. All awards will be rounded to the nearest $100.

Change in Status	An employee hired into an eligible position during the Plan Year may participate in the Plan for the balance of the Plan Year on a pro rata basis.

Certain Terminations of Employment	In the event a participant voluntarily terminates employment (other than Retirement) or is terminated involuntarily before the payment date, any Award will be forfeited. In the event of death, Disability or Retirement, the award will be paid on a pro rata basis at the higher of the Target Incentive


		or actual performance after the end of the Plan Year. Awards otherwise will be calculated on the same basis as for other participants.

Change In Control		In the event of a Change in Control, pro rata payouts will be made at the greater of (1) Target Incentives or (2) actual results for the year-to-date, based on the number of days in the Plan Year preceding the Change in Control. Payouts will be made within 30 days after the relevant transaction has been completed.

Withholding		The Company shall withhold from award payments any Federal, foreign, state or local income or other taxes required to be withheld.

Communications		Progress reports should be made to participants quarterly showing the year-to-date performance results and the percentage of Target Incentives that would be earned if results remain at that level for the entire year.

Executive Officers		Notwithstanding any provisions to the contrary above, participation, Target Incentive Awards and prorations for executive officers, including the President and Chief Executive Officer, shall be approved by the Compensation Committee.

Stockholder Approval		The 2007 Plan and the awards hereunder are made pursuant to the Incentive Plan, which is subject to approval by the Company’s stockholders at the Annual Meeting of Stockholders to be held on April 26, 2007. Any award made under the 2007 Plan before the Incentive Plan is approved by the Company’s stockholders is conditioned upon such approval and will be null and void if the Incentive Plan is not so approved.

Governance		The Compensation Committee of the Board of Directors of Lance, Inc. is ultimately responsible for the administration and governance of the Plan. Actions requiring Committee approval include final determination of plan eligibility and participation, identification of performance measures, performance objectives and final award determination. The Committee shall adjust any award due to extraordinary events such as acquisitions, dispositions, discontinued operations, required accounting adjustments or similar events ; all as specified in Section 11(d) of the Incentive Plan. The decisions of the Committee shall be conclusive and binding on all participants.

Exhibit A

Performance Measures
($ in millions, except Corporate EPS)


Performance Measure	Weight	Threshold	Target	Maximum

Corporate EPS*	45%	$0.70	$0.80	$1.11

Net Sales Dollars*	35%	$**	$**	$**

Economic Profit*	20%	$**	$**	$**


*		Excludes special items and discontinued operations

**		These performance objectives are omitted because they are based on our confidential and competitively sensitive business plans and we believe disclosure of the objectives would likely result in substantial harm to our competitive positions. We view the target performance objectives to be achievable if we generally meet our operating plans for 2007.

Exhibit B


		Award			Target
Name	Title	Percentage			Incentive

David V. Singer	President and Chief Executive Officer		100	%	$	550,000

R. D. Puckett	Executive Vice President, Chief Financial Officer, Treasurer and Secretary		50	%	$	183,750

G. A. Patcha	Senior Vice President — Sales and Marketing		*	%	$	*

E. D. Leake	Vice President — Human Resources		50	%	$	112,500

B. W. Thompson	Vice President — Supply Chain		50	%	$	137,500

F. I. Lewis	Vice President — Sales		50	%	$	132,600

H. D. Fields	Vice President — Corporate		*	%	$	*

M. E. Wicklund	Controller and Assistant Secretary		*	%	$	*


*		Amounts are omitted for participants other than the Chief Executive Officer, Chief Financial Officer and the Executive Officers who are named in the Summary Compensation Table of the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders.

Exhibit 10.6


STATE OF NORTH CAROLINA
		AGREEMENT
COUNTY OF MECKLENBURG

THIS AGREEMENT (this “Agreement”) is entered into as of the Effective Date (defined below) by and between LANCE, INC., a North Carolina corporation (the “Company”), and L. R. Gragnani, Jr. (“Gragnani”).

STATEMENT OF PURPOSE

Gragnani has been employed by the Company for a number of years and currently holds the position of Vice President — Information Technology/CIO. On November 10, 1997, the Company and Gragnani entered into an Executive Severance Agreement (the “Severance Agreement”) whereby the Company agreed to provide Gragnani with certain benefits in the event of a termination of his employment. In addition, also on November 10, 1997, the Company and Gragnani entered in to a Compensation and Benefits Assurance Agreement whereby the Company agreed to provide Gragnani with certain benefits in the event of the termination of his employment under certain specified circumstances in connection with a Change in Control, as defined in the Compensation and Benefits Assurance Agreement.

The parties have agreed to terminate the employment relationship and to resolve all issues relating to Gragnani’s employment with the Company and the termination of that employment relationship on the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the Statement of Purpose and the terms and provisions of this Agreement, the parties hereto mutually agree as follows:

1. Definitions . As used herein, the following terms shall have the following meanings:

	(a)		“Affiliate” with reference to the Company means any Person that directly or indirectly is controlled by, or is under common control with, the Company, including each subsidiary of the Company. For purposes of this definition the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

	(b)		“Person” means any individual, corporation, association, partnership, business trust, joint stock company, limited liability company, foundation, trust, estate or other entity or organization of whatever nature.

	(c)		“Effective Date” with reference to this Agreement means the eighth (8th) day following the execution of this Agreement, if not a Saturday, Sunday

or legal holiday, and if such day is a Saturday, Sunday or legal holiday, then the first business day following such eighth (8th) day.

2. Termination of Employment; Resignation from Offices. The Company does hereby terminate Gragnani’s employment without cause, with said termination to be effective as of February 14, 2007 (the “Termination Date”); however, beginning on January 24, 2007, Gragnani will be relieved from the performance of his regular duties and shall only be required to make himself available from time to time, during normal business hours, as requested by the Company’s Chief Financial Officer or his designee, to consult with Company officials on matters related to the business of the Company. As requested by the Company, Gragnani hereby resigns from all offices, committees and positions he holds with the Company and its Affiliates, including but not limited to the position of Vice President — Information Technology/CIO, with said resignation to be effective as of the Termination Date. If requested by the Company, Gragnani will execute any additional resignation letters, forms or other documents that acknowledge his resignation from such employment, positions, committees and offices.

3. Payments by the Company. The Company agrees to pay or provide Gragnani with the following:

	(a)		Compensation and benefits to which Gragnani is otherwise entitled as an employee of the Company at Gragnani’s current rate and status until the Termination Date in accordance with the Company’s generally applicable policies and procedures (because he will not be required to work normal business hours during the period from January 24, 2007 through the Termination Date, Gragnani agrees that salary continuation during that period shall exhaust Gragnani’s accrued vacation entitlement);

	(b)		Compensation and benefits to which Gragnani is entitled under the Severance Agreement in accordance with the terms of the Severance Agreement. For purposes hereof, the Company acknowledges and agrees that the termination of Gragnani’s employment shall be considered to have been an “involuntary Termination of Employment without Cause,” and Gragnani is entitled to receive all payments and benefits set forth in Paragraph 4 of the Severance Agreement. The parties agree that Gragnani is entitled to be paid $264,600 under Paragraph 4(a) of the Severance Agreement and that Gragnani is entitled to receive under Paragraph 4(c) of the Severance Agreement the greater of (i) $9,299 or (ii) the actual bonus earned through the Termination Date;

	(c)		Gragnani has participated in various Company sponsored incentive plans. As the result of the termination of his employment, he will forfeit certain unvested benefits under the 2003 Long—Term Incentive Plan for Officers and the 2004 Long-Term Incentive Plan for Officers and will forfeit all benefits (because none are vested) under the 2005 Long-Term Incentive Plan for Officers, the 2006 Five-Year Performance Equity Plan for Officers and Senior Managers and the 2006 Three-Year Incentive Plan for Officers. As additional consideration for the execution of this Agreement and in satisfaction of any claim to the unvested benefits under the 2003

			Long-Term Incentive Plan for Officers (the stock options and restricted stock which would have become vested in April of 2007) and in satisfaction of all of his rights (whether vested or unvested) under all of the 2004, 2005 and 2006 incentive plans referenced above, the Company agrees to pay Gragnani the sum of $128,500;

	(d)		Gragnani has participated in various other Company sponsored benefit plans including the Compensation Deferral and Benefit Restoration Plan, Profit-Sharing and 401(k) Retirement Savings Plan, the Employee Stock Purchase Plan and other Long-Term Incentive Plans. All of Gragnani’s vested interests in any benefit plan in which he had vested interests as of the Termination Date (except the 2004 Long-Term Incentive Plan for Officers referenced in Paragraph 3(c) above) shall be paid when and as provided in, and otherwise subject to, the terms, provisions and conditions of the applicable plans, and nothing in this Agreement shall modify or override the terms, provisions or conditions of those plans;

	(e)		In the event that Gragnani elects to continue his medical insurance coverage under COBRA, the Company will pay the COBRA premium (except for the amount of the group insurance premium that the Company’s employees must customarily contribute from time to time for similar coverage, until the earlier of (i) February 13, 2008 or (ii) the date Gragnani becomes eligible for medical insurance coverage under a successor employer’s plan;

	(f)		The Company will provide Gragnani with 90 days of outplacement services through a vendor to be identified and paid by the Company. The outplacement will begin on a date chosen by Gragnani no later than ninety (90) days from the Effective Date;

	(g)		The Company will sell Gragnani the automobile used by him in connection with his employment for $20,000 which represents a discount off the retail value of such vehicle.

4. Termination of Compensation and Benefits Assurance Agreement and all Other Benefits Not Specified in this Agreement . It is agreed that this Agreement is not being entered into in connection with a Change in Control, that Gragnani is not entitled to receive any compensation or benefits under the Compensation and Benefits Assurance Agreement, that the Compensation and Benefits Assurance Agreement is hereby terminated and that neither party has any further rights and obligations thereunder. The Company and Gragnani acknowledge and agree that all other benefits and perquisites related to or resulting from Gragnani’s employment and positions with the Company and its Affiliates, which are not described and provided for in this Agreement, terminate on the Termination Date, and that the Company has no further obligations with respect thereto.

5. Confidential Information and Company Property. Gragnani acknowledges that by reason of Gragnani’s employment by the Company, Gragnani has had access to certain Company “Trade Secrets” (as defined in the North Carolina Trade Secrets Protection Act,

N.C.G.S. §66-152) and confidential Company information relating to the business of the Company (collectively “Confidential Information”). Gragnani agrees that he shall not directly or indirectly use, reveal, disclose or remove from the Company’s premises Confidential Information or material containing Confidential Information, without the prior written consent of the Company. In addition, Gragnani represents that he has returned to the Company all property of the Company which was in his possession.

6. Employment Taxes and Withholdings . Gragnani acknowledges and agrees that the Company shall withhold from the payments and benefits described in this Agreement all taxes, including income and employment taxes, required to be so deducted or withheld under applicable law.

7. Confidentiality of this Agreement; Employment Reference. Gragnani shall not at any time, directly or indirectly, discuss with or disclose to anyone (other than to members of his immediate family, his attorneys, his tax advisors and the appropriate taxing authorities or as otherwise required by law, hereinafter “Qualified Persons”) the terms of this Agreement, including the amounts payable hereunder. If any person asks about the above matters, he will simply say that all issues relating to his employment have been resolved. Gragnani further agrees that he will refrain from making derogatory comments about the Company or its agents or Affiliates. The Company agrees that the Company and its officers and managers will likewise refrain from making derogatory comments about Gragnani. The Company further agrees that if any person makes inquiry concerning Gragnani, the Company will advise such person only as to the dates of Gragnani’s employment with the Company and the positions held.

8. Release of the Company. Gragnani, on behalf of himself and his heirs, personal representatives, successors and assigns, hereby releases and forever discharges the Company and its Affiliates, and each and every one of their respective present and former shareholders, directors, officers, employees and agents, and each of their respective successors and assigns, from and against any and all claims, demands, actions, causes of action, damages, costs and expenses, including without limitation all “Employment-Related Claims,” which Gragnani now has or may have by reason of any thing occurring, done or omitted to be done prior to the Effective Date of this Agreement; provided , however , this release shall not apply to any claims that Gragnani may have for the payments or benefits expressly provided for Gragnani or otherwise specifically referred to in this Agreement. For purposes of this Agreement, “Employment-Related Claims” means all rights and claims Gragnani has or may have:

	(i)		related to his employment by or status as an employee of the Company or any of its Affiliates or the termination of that employment or status or to any employment practices and policies of the Company, or its Affiliates;

	(ii)		related to any of the incentive plans referenced in Paragraph 3(c) above; and

	(iii)		under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).

9. Special ADEA Waiver Acknowledgements. GRAGNANI ACKNOWLEDGES AND AGREES THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED (“ADEA”). GRAGNANI FURTHER ACKNOWLEDGES AND AGREES THAT:

	(a)		THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE EFFECTIVE DATE OF THIS AGREEMENT;

	(b)		HE IS ENTERING INTO THIS AGREEMENT AND RELEASING, WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN EXCHANGE FOR CONSIDERATION THAT HE IS NOT ALREADY ENTITLED TO RECEIVE;

	(c)		HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS AGREEMENT;

	(d)		HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT, THAT HE HAS UP TO TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND TO DELIVER (OR CAUSE TO BE DELIVERED) THIS AGREEMENT TO EARL D. LEAKE, VICE PRESIDENT OF HUMAN RESOURCES, AND THAT IF HE EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY WAIVES HIS RIGHTS WITH RESPECT TO THE REMAINING TIME, AND THAT THE AGREEMENT WILL BECOME EFFECTIVE THE EIGHTH DAY AFTER HE SIGNS IT AS REFERENCED IN PARAGRAPH 9(e) BELOW; AND

	(e)		HE IS AWARE THAT HE MAY REVOKE THIS AGREEMENT AT ANY TIME WITHIN SEVEN (7) DAYS AFTER THE DAY HE SIGNS THIS AGREEMENT AND THAT THIS AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EIGHTH DAY AFTER THE DATE THIS AGREEMENT IS SIGNED, ON WHICH DAY, THE EFFECTIVE DATE, THIS AGREEMENT WILL AUTOMATICALLY BECOME EFFECTIVE UNLESS PREVIOUSLY REVOKED WITHIN THAT SEVEN-DAY PERIOD. HE IS ALSO AWARE THAT TO AFFECT A REVOCATION, HE MAY, WITHIN THE SEVEN-DAY PERIOD DELIVER (OR CAUSE TO BE DELIVERED) TO EARL D. LEAKE, VICE PRESIDENT OF HUMAN RESOURCES, NOTICE OF HIS REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M. EASTERN TIME ON THE SEVENTH (7TH) DAY FOLLOWING HIS EXECUTION OF THIS AGREEMENT.

10. Applicable Law. This Agreement is made and executed with the intention that the construction, interpretation and validity hereof shall be determined in accordance with and governed by the laws of the State of North Carolina.

11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns. This Agreement shall be binding upon and inure to the benefit of Gragnani, his heirs, executors and administrators.

12. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and cancels all prior or contemporaneous oral or written agreements and understandings between them with respect to the subject matter hereof.

IN WITNESS WHEREOF , the Company has caused this Agreement to be signed by its duly authorized officer on the execution date indicated below, and Gragnani has hereunto set his hand and seal on the execution date indicated below.


		LANCE, INC.

		By		s/ Earl D. Leake

				Earl D. Leake Vice President of Human Resources

		Execution Date: 1/24/07

		s/ Louis R. Gragnani, Jr.

		L. R. Gragnani, Jr.

		Execution Date: 1/31/07

Exhibit 10.7


		Lance, Inc. P.O. Box 32368 Charlotte, NC 28232-2368 Phone: 704/554-1421

December 21, 2006

Mr. Glenn A. Patcha
31311 Avenida Terramar
San Juan Capistrano, CA 92675

Dear Glenn:

After the series of interviews with our executive management team, we feel you can be a real asset to Lance, Inc. Also, Lance will afford you the opportunity to continue your growth and development. I feel it’s a good match and we would like for you to come on board as our Senior Vice President of Sales and Marketing. To that end, you will find our offer outlined below.

Compensation :

	•		Base pay — $330,000 annually

	•		Participation in the Corporate Annual Incentive Plan with a target incentive potential of 50% of your annual base salary. If goals are exceeded, there’s an opportunity to earn one times annual salary.

	•		Guaranteed Incentive — for fiscal year 2007, a guarantee of 25% of salary paid in 2007.

	•		Signing Bonus — $20,000 payable within the first month of employment.

	•		Long-Term Incentive Plan (LTIP)

			Currently the Long-Term Incentive Plans are as follows:

Three year plan with new plan rolled out each year.

	—		Target value will be 45% of base pay with payout potential to be greater if targeted goals are exceeded.

	—		Measure is Return on Capital Employed (ROCE)

A Five-Year LTIP funded with restricted stock.

—

Your opportunity is 48,000 shares, which represents four (4) years of participation

Mr. Glenn A. Patcha
Page 2
December 21, 2006

	—		Measure is stock appreciation vs. Russell 2000 Index

	—		Time horizon is 5 years (2006 — 2010).

Benefits and Perquisites

	•		Auto allowance — $1,200.00 per month, subject to applicable withholdings.

	•		Four (4) weeks vacation.

	•		Equity

	—		20,000 restricted grant shares with three (3) year cliff vesting.

	—		25,000 stock options at market price, based on closing price on first day of employment. (Vest 25% per year over four (4) years.)

Other Benefits

	•		Executive Severance Agreement which provides one (1) year base pay, plus target incentive of Annual Incentive Plan for termination without cause. Medical benefits would continue during the severance period, provided no other employer coverage is available and provided the former employee pays the employee cost for the coverage.

	•		Employee Health Plan includes medical, dental, life and AD&D.

	•		Profit Sharing and Retirement Plan after one year eligibility.

	•		401(k) Plan.

	•		Change in Control (CIC) Benefit — we are reviewing our policy, but will provide CIC benefits that are reasonable.

	•		Employee Stock Purchase Plan.

	•		Employee Assistance Program.

Mr. Glenn A. Patcha
Page 3
December 21, 2006

Relocation

•

Will relocate family and household goods to Charlotte, North Carolina area, per the company’s relocation program. Temporary living arrangements are available if needed.

Glenn, it’s an exciting time at Lance and we feel you can help us reach our goal of becoming a high performance organization.

You will be a member of our executive management team, which we presently call the Senior Team.

Thanks for your consideration and interest in the House of Lance. Please contact me for any questions regarding this offer.

This offer is contingent on the successful completion of a drug test screen and favorable employment related references.

Also, in accordance with the Board of Directors Governance Principles and Bylaws of Lance, this letter, your election as an officer, the fixing of your compensation and the grant of stock options and restricted stock is not binding or effective until action and approval by the Board of Directors of Lance and its Compensation Committee.

Acceptance may be communicated by signing below with date and forwarding a copy to my attention.


		Sincerely,

		/s/ Earl D. Leake

		E. D. Leake Vice President — Human Resources

ACCEPTED:

/s/ Glenn A. Patcha		1/29/2007

Glenn A. Patcha		Date

Exhibit 10.9


STATE OF NORTH CAROLINA
		RETIREMENT AGREEMENT
COUNTY OF MECKLENBURG

THIS RETIREMENT AGREEMENT (this “Agreement”) is entered into as of the Effective Date (defined below) by and between LANCE, INC., a North Carolina corporation (the “Company”), and H. DEAN FIELDS (“Fields”).

STATEMENT OF PURPOSE

Fields has been employed by the Company for many years and has contributed materially to the successful operation of the Company’s business. Fields has advised the Company of his intention to retire, and the Company has expressed the desire to continue to have the benefit of Fields’ advice, counsel and services during a transition period while his duties and responsibilities are being transitioned to others. The Company recognizes Fields’ dedication to the Company and has expressed its gratitude for his effective service. Fields is currently a Vice President of the Company and the President of Vista Bakery, Inc., one of the Company’s subsidiaries.

During his employment with the Company, Fields entered into a Compensation and Benefits Assurance Agreement and an Executive Severance Agreement, both dated April 17, 1998. This agreement terminates and replaces both of those agreements.

The parties have agreed to resolve all issues relating to Fields’ employment with the Company and his retirement from employment on the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the Statement of Purpose and the terms and provisions of this Agreement, the parties hereto mutually agree as follows:

1. Definitions . As used herein, the following terms shall have the following meanings:

	(a)		“Affiliate” with reference to the Company means any Person that directly or indirectly is controlled by, or is under common control with, the Company, including each subsidiary of the Company. For purposes of this definition the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

	(b)		“Person” means any individual, corporation, association, partnership, business trust, joint stock company, limited liability company, foundation, trust, estate or other entity or organization of whatever nature.

	(c)		“Effective Date” with reference to this Agreement means the eighth (8th) day following the execution of this Agreement by Fields, if not a Saturday, Sunday or legal holiday, and if such day is a Saturday, Sunday or legal holiday, then the first business day following such eighth (8th) day.

	(d)		“Business” means (i) the snack food industry and (ii) the business(es) in which the Company or its Affiliates are or were engaged at the time of, or during the 12 month period prior to, the Retirement Date.

	(e)		“Company Employee” means any Person who is or was an employee of the Company or its Affiliates at the time of, or during the 12 month period prior to, the Retirement Date.

	(f)		“Customer” means any Person who is or was a customer or client of the Company or its Affiliates (i) at the time of, or during the 12 month period prior to, the Retirement Date or (ii) at the time of, or during the 12 month period prior to, the Retirement Date and with whom Fields had dealings in the course of his employment with the Company.

	(g)		“Products and Services” means (i) snack foods and (ii) the products and/or services offered by the Company or its Affiliates at the time of, or during the 12 month period prior to, the Retirement Date.

	(h)		“Representative” of a Person means (i) a shareholder, director, officer, member, manager, partner, joint venturer, owner, employee, agent, broker, representative, independent contractor, consultant, advisor, licensor or licensee of, for, to or with such Person, (ii) an investor in such Person or a lender (irrespective of whether interest is charged) to such Person or (iii) any Person acting for, on behalf of or together with such Person.

	(i)		“Restricted Period” means the period commencing on the Retirement Date and ending on the first anniversary of the Retirement Date.

	(j)		“Retirement Date” means December 29, 2007.

	(k)		“Territory” means: (i) the States of North Carolina, Iowa and Arkansas, (ii) any other State in which the Company or its Affiliates does or did business at the time of, or during the 12 month period prior to, the Retirement Date, and (iii) the United States of America.

2. Retirement Date; Duties pending Retirement; Resignation from Offices. The parties agree that Fields will retire from his employment with the Company, effective on the Retirement Date.

During the period from the Effective Date of this Agreement until the Retirement Date, Fields will diligently assist the Company in the transition of his duties and responsibilities to

others, assist in maintaining customer relationships (which may include reasonable travel) and perform such other tasks as reasonably requested by the Company’s President or his designee.

Fields does hereby resign from his position as President of Vista Bakery, Inc. and from all offices, committees and positions he holds with the Company and its Affiliates (except the position of Vice President of the Company), with such resignation to be effective on the Effective Date of this Agreement. Fields does hereby resign from his position as Vice President of the Company, with such resignation to be effective on the Retirement Date. Fields will execute any additional resignation letters, forms or other documents that acknowledge his resignation from such employment, positions, committees and offices.

3. Payments and Benefits to be provided by the Company. The Company agrees to pay or provide Fields with the following:

	(a)		Fields will continue to receive his current salary and normal employee and welfare benefits through the Retirement Date in accordance with the Company’s generally applicable policies and procedures; he will be entitled to use his accrued vacation benefits during 2007, but it is agreed that he will neither be granted nor accrue any additional vacation benefits;

	(b)		Fields will receive payment, in a lump sum, of the amount earned by him under the 2006 Annual Incentive Plan, with payment to be made during the first quarter of 2007 at the same time as payments under said Plan are made to the other participants;

	(c)		Fields is eligible to participate in the 2007 Annual Incentive Plan; however, the parties agree that, in lieu of any payment he might otherwise be entitled to receive under the Plan, Fields will receive, in a lump sum, an amount equal to his 2007 target bonus opportunity ($78,800.00), which amount shall be payable before March 15, 2008;

	(d)		Fields has participated in other Company sponsored benefit plans, including Long-Term Incentive and Stock Plans, Profit-Sharing and 401(k) Retirement Savings Plan, Compensation Deferral and Benefit Restoration Plan and Employee Stock Purchase Plan; all of Fields’ vested interests in such benefit plans shall be paid when and as provided in, and otherwise subject to, the terms, provisions and conditions of the applicable plans, and nothing in this Agreement shall modify or override the terms, provisions or conditions of those plans; and

	(e)		As additional consideration for the Covenants Regarding Competition and Customers (Paragraph 5 below), the Company will pay Fields the sum of $12,000.00 on July 1, 2008 and the sum of $12,000.00 on December 31, 2008.

4. Termination of All Other Benefits Not Specified in this Agreement . The Company and Fields acknowledge and agree that all other benefits and perquisites related to or resulting from Fields’ employment and positions with the Company and its Affiliates, which are

not described and provided for in this Agreement, terminate on the Effective Date, and that the Company has no further obligations with respect thereto. It is specifically agreed that the Compensation and Benefits Assurance Agreement and the Executive Severance Agreement, both dated April 17, 1998, are hereby terminated and replaced by the compensation and benefits provided in this Agreement.

5. Covenants Regarding Competition and Customers. Fields agrees not to engage in any activities competitive with the Company or its Affiliates at any time during his employment with the Company, including any activities similar to those described in subparagraphs (a) through (f) below, except in furtherance of the Company’s business. Furthermore, Fields agrees that, except as otherwise approved in writing by the Company, during the Restricted Period, he will not, directly or indirectly:

	(a)		engage in the Business in the Territory or market, sell or provide Products and Services in the Territory;

	(b)		solicit any Customer for purposes of marketing, selling or providing Products and Services to such Customer;

	(c)		accept as a customer any Customer for purposes of marketing, selling or providing Products and Services to such Customer;

	(d)		induce or attempt to induce any Company Employee to terminate his employment with the Company or its Affiliates;

	(e)		interfere with the business relationship between a Customer, Company Employee or supplier and the Company or its Affiliates; or

	(f)		be or become a Representative of any Person who engages in any of the foregoing activities.

6. Reasonableness of Restrictions. Fields agrees that the covenants in Paragraph 5 are reasonable given the real and potential competition encountered (and reasonably expected to be encountered) by the Company and its Affiliates and the substantial knowledge and goodwill that Fields has and will acquire with respect to the business of the Company and its Affiliates as a result of his employment and continued employment with the Company. Notwithstanding the foregoing, in the event that any provision of this Agreement is determined by a court to be invalid or unenforceable, such court may, and is hereby authorized to, reduce or limit the terms of such provision to allow it to be enforced.

7. Confidential Information and Company Property. Fields acknowledges that by reason of Fields’ employment by the Company, Fields has had access to certain Company “Trade Secrets” (as defined in the North Carolina Trade Secrets Protection Act, N.C.G.S. §66-152), confidential product formulations and other proprietary information about the Company’s business (collectively “Confidential Information”). Fields agrees that he shall not directly or indirectly use, reveal, disclose or remove from the Company’s premises Confidential Information or material containing Confidential Information, without the prior written consent of

the Company. In addition, Fields represents that he will return to the Company all property of the Company, including all Confidential Information, which is now or may hereafter come into his possession.

8. Employment Taxes and Withholdings . Fields acknowledges and agrees that the Company shall withhold from the payments and benefits described in this Agreement all taxes, including income and employment taxes, required to be so deducted or withheld under applicable law.

9. Confidentiality of this Agreement; Employment Reference. Fields shall not at any time, directly or indirectly, discuss with or disclose to anyone (other than to members of his immediate family, his attorneys, his tax advisors and the appropriate taxing authorities or as otherwise required by law, hereinafter “Qualified Persons”) the terms of this Agreement, including the amounts payable hereunder. If any person asks about the above matters, he will simply say that all issues relating to his employment and his retirement have been resolved. The Company further agrees that if any person makes inquiry concerning Fields, the Company will advise such person only as to the dates of Fields’ employment with the Company, the positions held and that Fields has or will retire from service on behalf of the Company on December 29, 2007.

10. Release of the Company. Fields, on behalf of himself and his heirs, personal representatives, successors and assigns, hereby releases and forever discharges the Company and its Affiliates, and each and every one of their respective present and former shareholders, directors, officers, employees and agents, and each of their respective successors and assigns, from and against any and all claims, demands, actions, causes of action, damages, costs and expenses, including without limitation all “Employment-Related Claims,” which Fields now has or may have by reason of any thing occurring, done or omitted to be done prior to the Effective Date of this Agreement; provided , however , this release shall not apply to any claims that Fields may have for the payments or benefits expressly provided for Fields or otherwise specifically referred to in this Agreement. For purposes of this Agreement, “Employment-Related Claims” means all rights and claims Fields has or may have:

	(a)		related to his employment by or status as an employee of the Company or any of its Affiliates or the termination of that employment or status or to any employment practices and policies of the Company, or its Affiliates; or

	(b)		under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).

11. Special ADEA Waiver Acknowledgements. FIELDS ACKNOWLEDGES AND AGREES THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED (“ADEA”). FIELDS FURTHER ACKNOWLEDGES AND AGREES THAT:

	(a)		THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE EFFECTIVE DATE OF THIS AGREEMENT;

	(b)		HE IS ENTERING INTO THIS AGREEMENT AND RELEASING, WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN EXCHANGE FOR CONSIDERATION THAT HE IS NOT ALREADY ENTITLED TO RECEIVE;

	(c)		HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS AGREEMENT;

	(d)		HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT, THAT HE HAS UP TO TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND TO DELIVER (OR CAUSE TO BE DELIVERED) THIS AGREEMENT TO EARL D. LEAKE, VICE PRESIDENT OF HUMAN RESOURCES, AND THAT IF HE EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY WAIVES HIS RIGHTS WITH RESPECT TO THE REMAINING TIME, AND THAT THE AGREEMENT WILL BECOME EFFECTIVE THE EIGHTH DAY AFTER HE SIGNS IT AS REFERENCED IN PARAGRAPH 11(e) BELOW; AND

	(e)		HE IS AWARE THAT HE MAY REVOKE THIS AGREEMENT AT ANY TIME WITHIN SEVEN (7) DAYS AFTER THE DAY HE SIGNS THIS AGREEMENT AND THAT THIS AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EIGHTH DAY AFTER THE DATE THIS AGREEMENT IS SIGNED, ON WHICH DAY, THE EFFECTIVE DATE, THIS AGREEMENT WILL AUTOMATICALLY BECOME EFFECTIVE UNLESS PREVIOUSLY REVOKED WITHIN THAT SEVEN-DAY PERIOD. HE IS ALSO AWARE THAT TO AFFECT A REVOCATION, HE MAY, WITHIN THE SEVEN-DAY PERIOD DELIVER (OR CAUSE TO BE DELIVERED) TO EARL D. LEAKE, VICE PRESIDENT OF HUMAN RESOURCES, NOTICE OF HIS REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M. EASTERN TIME ON THE SEVENTH (7TH) DAY FOLLOWING HIS EXECUTION OF THIS AGREEMENT.

12. Severability. Each provision of this Agreement is severable from every other provision of this Agreement. Any provision of this Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision hereof or the invalid or unenforceable provision in any other situation or any other jurisdiction. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

13. Applicable Law. This Agreement is made and executed with the intention that the construction, interpretation and validity hereof shall be determined in accordance with and governed by the laws of the State of North Carolina.

14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns. This Agreement shall be binding upon and inure to the benefit of Fields, his heirs, executors and administrators.

15. Compliance with 409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code, to the extent applicable. Notwithstanding any provision herein to the contrary, this Agreement shall be interpreted and administered consistent with this intent.

16. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and cancels all prior or contemporaneous oral or written agreements and understandings between them with respect to the subject matter hereof.

IN WITNESS WHEREOF , the Company has caused this Agreement to be signed by its duly authorized officer on the execution date indicated below, and Fields has hereunto set his hand and seal on the execution date indicated below.


		LANCE, INC.

		By		/s/ Earl D. Leake

				Earl D. Leake Vice President

		Execution Date: 3/16/2007

		/s/ H. Dean Fields

		H. Dean Fields

		Execution Date: 3/16/2007

LANCE, INC. AND SUBSIDIARIES

EXHIBIT 31.1

MANAGEMENT CERTIFICATION

I, David V. Singer certify that:

I have reviewed this quarterly report on Form 10-Q of Lance, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


	Date: April 27, 2007

	/s/ David V. Singer

	David V. Singer
	President and Chief Executive Officer

LANCE, INC. AND SUBSIDIARIES

EXHIBIT 31.2

MANAGEMENT CERTIFICATION

I, Rick D. Puckett, certify that:

I have reviewed this quarterly report on Form 10-Q of Lance, Inc.;

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


	Date: April 27, 2007

	/s/ Rick D. Puckett

	Rick D. Puckett
	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

LANCE, INC. AND SUBSIDIARIES

EXHIBIT 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lance, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David V. Singer, President and Chief Executive Officer of the Company, and Rick D. Puckett, Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Lance, Inc. and will be retained by Lance, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.


/s/ David V. Singer		/s/ Rick D. Puckett

David V. Singer		Rick D. Puckett
President and Chief		Executive Vice President,
Executive Officer		Chief Financial Officer,
April 27, 2007		Treasurer and Secretary
		April 27, 2007